Coca-Cola plans to put its marketing spend on hold for markets that are slow to reopen. This comes as pandemic-related lockdowns have impacted many of its markets and as countries roll out their vaccination programmes. During a recent earnings call, chairman and CEO James Quincey said it will continue to reintroduce marketing spend "in a targeted way", particularly as it ramps up investments in markets that are seeing recovery.
"If we see the demand is coming in at the kind of the higher end, because more reopenings happen more quickly for whatever reason and revenue starts to accelerate, we are also likely to reaccelerate the restitution of the marketing spend," he said. Conversely, if the revenue starts to look a little weaker, Quincey said it will hold back on some of the marketing.
For the first quarter of 2021, Asia Pacific brought in a net revenue of US$1.4 billion, a 24% increase compared to the same period in 2020. Meanwhile, overall revenue was US$9 billion, a 5% increase from Q1 2020. According to Quincey, China continues to lead the recovery with volume in the first quarter ahead of 2019 results and foot traffic almost back to pre-pandemic levels.
He added that Coca-Cola will continue to "reenergise" the China market with a big push into digital engagement and eCommerce where the brand is reaping gains. Meanwhile, India and Southwest Asia also witnessed strong performance driven by effective marketing across brands, affordable solutions, and distribution expansion with 250,000 new outlets and 45% more new coolers.
Despite the unexpected state of emergency earlier in the year, Japan expands its successful revenue growth management initiatives geographically and across brands to help drive improvements later in the quarter.
"In markets at the forefront of recovery, we have seen early signs that our actions taken during the pandemic are helping us outpace recovery. It is important to note, the path to a full recovery remains asynchronous around the world," Quincey said. On a whole, the global marketing category leadership teams primarily focus on innovation, marketing efficiency, and effectiveness.
"We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up, and we remain confident in our full-year guidance," he added. Coca-Cola is currently in the midst of a global creative and media agency review which Quincey previously said will improve processes, eliminate duplication, and drive efficiency to fuel reinvestment in its brands. During the earnings call for its Q4 2020 results, Quincey said its innovation pipeline for 2021 has been shaped and coordinated for scale and impact. These include the expansion of its authentic teahouse franchise across Asia and unveiling a new taste and design for Coke Zero Sugar.
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