The Coca-Cola Company has witnessed some investments and acquisitions in the past year, for example, Costa Coffee and sports performance drink BODYARMOR. This comes as the company intends to diversify its beverage offerings and leverage on mergers and acquisitions (M&A) to broaden its consumer-centric portfolio.
In its latest earnings call, CEO James Quincey said Coca-Cola created a new group named Global Ventures is created to focus on getting the "maximum value" from acquisition and investments, as well as ensure it can properly connect and globally scale key acquisitions.
Quincey added that Coca-Cola has had acquisitions and venturing emerging brand units in different parts of the world. However, it has been unsuccessful in "tying that together" across the region and groups. As such, it formed Global Ventures to help push and drive the agenda for greater speed, rather than leaving certain initiatives to be successful in one group and taking a long while to be implemented in another. Global Ventures will also partner with colleagues worldwide to identify and nurture future fast-growing opportunities.
"We're not as good at that as we would like to be or are perhaps as fast as we would like to be, better said, which is why we're bringing the Global Ventures organisational unit into being, to just give an extra twist to accelerating that piece of the strategy of lifting, shifting and scaling," he explained.
In the recent quarter, Coca-Cola's net revenues dropped by 9% to US$8.2 billion while its organic revenues increased by 6%. Its sparkling soft drinks category grew by 2%, driven by Trademark Coca-Cola along with strong growth in the low- and no-calorie offerings of Sprite and FANTA. According to the financial statement, Coca-Cola's strong organic revenue growth in the quarter was driven by continued innovation and revenue growth management initiatives within sparkling soft drinks.
Meanwhile, sales of Diet Coke grew because it tapped into the Millennial demographic with new flavours and targeted marketing, CNBC reported. He added that the Diet Coke's new, sleek packaging was also more "modern" and "engaging" to Millennials who seemed "detached" from the product.
Another product category under Coca-Cola which grew was water, enhanced water and sports drinks, which saw a 5% increase in revenue due to strong growth of water in single-serve packaging in China and Mexico, along with the premium offerings in North America. Meanwhile, its tea and coffee category declined by 2%, while juice, dairy and plant-based beverages declined 3%.