Coke 3Q23: U.S. Segment Strength

Oct 30, 2023 | Corporate Insights, No Bull Economics

Coca-Cola reported that lower-income consumers are under the most pressure, particularly as it relates to at-home shopping occasions. However, there is a rebound & strong growth in away-from-home channels that extend beyond restaurants to amusement, travel, leisure, and hospitality channels.

Coke Sales by Segment

Consolidated Sales

  • Coke delivered strong +11% y/y organic revenue growth driven by +2% unit case growth and both new & carryover pricing actions.
  • Volume improved sequentially each month in the quarter with September being the strongest month.
  • Coke gained volume & share in both at-home and away-from-home channels during the quarter.
  • Consumer spending in developed markets has been solid, with certain consumers switching to private-label products although this trend is less pronounced in the U.S.

U.S. Business

  • Away-from-home strength is driving Coke’s U.S. business & sales.
  • North America strength was reported in sparkling soft drinks with higher household penetration & repeat purchases of its Sprite Lymonade Legacy product line.
  • Coke believes there is an opportunity for greater packaging diversity (pack size, can size & bottle shapes) given the current economic environment in which some demos seek more affordable options while others seek more premium options.

European Business

  • Coke reported the European consumer is under slightly more pressure than the U.S. consumer from a disposable income perspective, driving more trade-down & basket reduction.
  • This is consistent with +18% pricing in Europe which is more than double the +8% rate in North America.
  • As consumers typically do not trade down universally (but rather make a choice to save money in certain categories), the company’s objective is to make sure consumers value a wide variety of Coke brands so that they trade down into other Coke products rather than into private label brands. 

Coke 3Q23 Financials
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