The Coca-Cola Company (NYSE:KO) Speculated To Hold Strong Even With Slumping Diet Drinks’ Demand

Posted In Business, Markets - By David Francis On Tuesday, April 1st, 2014 With 0 Comments

Dallas, Texas 04/01/2014 (ustradevoice) –The Coca-Cola  Company (NYSE:KO) and other major soda companies have serious reasons to worry as carbonated beverage sales continue to decline in the U.S. with the rates increasing sharply year after year.

Decreasing Demand

According to a report published in Beverage Digest, after year of continuous growth for carbonated soft drinks’ companies including The Coca-Cola Company (NYSE:KO), PepsiCo, Inc. (NYSE:PEP), Mountain Dew, outperformed their diet versions in 2013. The editor, John Sicher pointed out that while sales of carbonated beverage had already been declining for the last few years in the U.S., a recent phenomenon has been noticed which marks a steep fall in diet drinks as well.

Soft drinks volumes last year fell for a straight ninth year with ever declining rates. Volumes in the U.S. recorded a decline of 3% last year, which is more than the 1.2% fall that was recorded in the prior year. According to Beverage Digest, with these levels, the industry is heading back to the volumes of 1995.

The Coca-Cola Company (NYSE:KO)’s Chief Executive Officer, Muhtar Kent said that the fall in overall carbonated beverage sales which hit the company in the previous quarter can be blamed on declining Diet Coke volumes. On the other hand, the CEO of PepsiCo believes that the shift in consumers’ habits, who demand natural sweetners as replacement of artificial sweetners in drinks, might be a reason for the low earnings recorded in the third quarter.

Strong Position

A beverage industry analyst at Wells Fargo, Bonnie Herzog, said that The Coca-Cola Company (NYSE:KO) is holding the strongest position in the industry while at the same time having the maximum to lose. He highlighted that the company obtains maximum volume from diet drinks in the portfolio of carbonated soft drinks. But the company’s saving grace is its strength of regular soft drinks whose huge international demand could help the company offset the diet drinks’ fall. 

About the Author

- David Francis earned a bachelor of arts degree in history from the New Orleans University and a master of arts degree in international relations from North Eastern University

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