Coca-Cola Company surprised industry analysts when they eliminated nearly half of their brand holdings in 2020 due to underperformance, leading to questions about the health of their leading product.
This article is based on corporate postings and accredited media reports. All linked information within this article is fully-attributed to the following outlets: CNN.com, Wikipedia.org, CNBC.com, MiamiHerald.com, and FastCompany.com.
The unexpected 2020 news that Coca-Cola Company was discontinuing 200 of its over 500 brand holdings immediately led to rumors about the financial health of not only the entity, but of its flagship drink.
In October of that year, Danielle Wiener-Bronner of CNN Business was among the many journalists who reported on the development, in her story entitled “Coke is Canceling 200 Drink Brands.”
As excerpted from the article: The beverage giant had already announced that it will discontinue some beloved, if outdated, drinks, like Tab, Zico and Odwalla. Thursday was the first time the company said it would get rid of 200 of them. Reducing the portfolio will allow Coca-Cola to focus on its most profitable offerings, the company explained. Those include its core products like Coca-Cola Zero Sugar as well as brands that fit into trendy new categories, like Topo Chico hard seltzer and AHA, a caffeinated seltzer the company launched last year.
Note that the article’s original CNN.com hyperlinks are included in the above excerpt.
The news caused concern in the food and beverage industry, as well as with the company’s patrons who questioned on social media and personal blogs whether Coca-Cola, as the company’s leading beverage, was about to be similarly discontinued.
However, news was brighter over a year later when CNBC.com reported, in February, 2022, that the company’s quarterly earnings surpassed Wall Street expectations.
From the article, titled “Coca-Cola Earnings Beat Estimates as Demand For Drinks Away From Home Tops Pre-Pandemic Levels”: Coca-Cola on Thursday reported quarterly earnings and revenue that beat analysts’ expectations as consumers drank more of the company’s products away from home, topping pre-pandemic levels for the first time. But the company issued a weaker-than-expected outlook, predicting that higher inflation would continue to weigh on its profits throughout 2022. Rival PepsiCo similarly warned investors about rising costs for packaging and transportation.
Issues remain, but neither the company nor its flagship product appears to be in serious trouble.
Has the concern been misplaced?
Let us explore further.
Coca-Cola Company, 2022
For a comprehensive overview of Coca-Cola Company, see Wikipedia page here, which states: The Coca-Cola Company is a multinational beverage corporation incorporated under Delaware’s General Corporation Law and headquartered in Atlanta, Georgia. The Coca-Cola Company has interests in the manufacturing, retailing, and marketing of non-alcoholic beverage concentrates and syrups, and alcoholic beverages. The company produces Coca-Cola, the sugary drink it is best known for, invented in 1886 by pharmacist John Stith Pemberton.
The company and the drink of the same name are American-made perennials.
An updated May, 2021 article from The Miami Herald, however, reported on yet another Coca-Cola Company discontinuance — this one in North America only — being its energy drink line that the company initiated during the prior year. Per the article, titled “Coca-Cola is Eliminating One of its Beverages. Here’s What to Know” by Dawson White: Coca-Cola Energy will be discontinued in North America due to petering sales, CNN reported. “An important component to this strategy is the consistent and constant evaluation of what’s performing and what’s not,” the company said in a statement to the outlet. “As we scale our best innovations quickly and effectively, like AHA and Coca-Cola with Coffee, we need to be disciplined with those that don’t get the traction required for further investment”
For a full and regularly-updated list of Coca-Cola’s canceled brands since 2020, see FastCompany.com article here.
As referenced in articles above, the 200-plus brand cancellations undertaken by Coca-Cola Company in recent years represented under 5% of the entity’s revenue.
Though Coca-Cola Company still services over 300 brands worldwide, including their main beverage, the company has stated in their financials that they will continue to explore new methods of profitability, including the possibility of eliminating further underperforming products.
Thank you for reading.