In a bid to better weather the pandemic, the company plans to shift focus onto brands "that can be scaled to drive profits for the long term," CEO James Quincey said during an earnings call Thursday.
|KO||THE COCA-COLA CO.||53.77||-1.18||-2.15%|
The streamlining is taking place during a rough stretch for Coca-Cola and almost all companies that cater to social events. Half of Coca-Cola’s sales come from stadiums, movie theaters and other places where people gather in large numbers — venues that have been closed in an attempt to curb the spread of COVID-19.
As it reshapes its portfolio, the company expects to offer "approximately 200 master brands" while phasing out some products.
Although Quincey didn't specify which brands would get the axe Thursday, he hinted that the reductions would be primarily in the "hydration space" rather "than any of the other sparkling, coffee and tea, or juice, dairy and plant" categories.
The company had already disclosed that it would be retiring underperforming products, including Odwalla, Tab diet soda and ZICO coconut water, Coca-Cola Life and Diet Coke Feisty Cherry, as well as regional offerings such as Northern Neck Ginger Ale and Delaware Punch.
Brands such as Coke, however, won't be among the discards. Quincey noted that the Coke brand is gaining share partly due to the "ongoing focus on Coke Zero Sugar."
Other brands, Quincey said, will be transitioned into regional offerings.
Revenue lost from the cuts should be "at least made up by existing global or regional brands," he said.
At the same time, the Atlanta-based company will also explore "new products in dynamic beverage categories" such as its alcohol-based seltzer, Topo Chico Hard Seltzer, which launched in the third quarter.