As consumers are becoming more and more cautious about sugar in their diet, food and beverage giants have joined the “battle of reducing sugar”, and Coca Cola, the world’s largest beverage company, is no exception.
“From 2017 to 2019, we have improved the formulation of nearly 1000 drinks.” Beatriz R. Perez, senior vice president and chief communications, public affairs, sustainability and marketing asset officer of Coca Cola, told an investor conference recently.
This trend has not only profoundly affected many of Coca Cola’s product formulations, but is expected to continue to play a decisive role in its future growth.
In order to reduce consumers’ concerns about sugar content in drinks, Coca Cola’s approach is “multi pronged”.
“We have been taking action to change the formula of drinks, reduce the added sugar, provide small packaging products, and innovate to introduce more beneficial beverages, and promote our low and zero calorie products, while providing consumers with easy to read and understand nutrition labels.” Perez said at the meeting.
She said the work remains Coca Cola’s “priority” right now, especially because of concerns about obesity and health, when people want to drink drinks with more benefits and usually less sugar during the outbreak.
“In pursuing our full range beverage strategy, we are continuously focusing on and optimizing our product portfolio, which will enable us to be truly consumer centric and focus on brands that have the potential to scale and drive profit growth in the long term.” Perez said.
Beatriz R. Perez, senior vice president and chief communications, public affairs, sustainability and marketing asset officer, Coca Cola
As introduced by the snack agent, Coca Cola, which currently has about 500 brands, plans to cut more than half of its brands. Among the retained brands, 78% belong to local brands, while regional brands and global brands account for 11%. They will be the most potential brands in “expanding consumer groups, increasing consumption frequency and improving Coca Cola system profit”.
From the perspective of category, drinking water and sports beverage products are the most favored by Coca Cola company, accounting for 35%. In addition, it is the company’s “start-up” soda, the number of brands accounted for 29% of the retained products. The third is juice, dairy products and plant base, accounting for 21%. The rest of the coffee and tea, other types together accounted for 15%.
Perez recently pointed out at the meeting that this is not to say that Coca Cola should provide fewer product choices, but the focus is on how to make better investment in those choices. For example, Coca Cola should “invest in its low and zero card products for a long time”.
“It’s like a gardener pruning his garden to produce fruit.” She said.
The attempt to cater to the consumption trend of low sugar and low card has indeed brought some returns to Coca Cola’s business.
“Our global sales increased in 2018 and 2019, while at the same time we reduced the amount of sugar added to our products, decreasing by an average of 4% per 100 ml in 2019 and 1.7% in 2018.” Perez said.
According to her, from 2017 to 2019, Coca Cola has improved the formula of nearly 1000 drinks. “In 2019, on a year-on-year basis, this is equivalent to about 350000 tons of added sugar from our drinks.” She said.
The beverage giant continues to increase the choice of low sugar or sugar free beverages.
“Our latest report shows that low sugar or sugar free beverages account for about 29% of our global sales, while about 45% of our product mix is low sugar or sugar free.” Perez said.
In addition to reducing the added sugar in products, Coca Cola helps consumers “control sugar” by starting with quantitative packaging. “We also have small packaging products.” According to Perez, about 42% of the company’s brands currently have specifications of 250 ml or less.
In addition, she said, in many markets, Coca Cola has joined industry actions aimed at reducing sugar addition. In Europe, the EU calls for a 10% reduction in sugar addition by 2020. A recent survey by global data, an independent research firm, shows that the beverage industry has achieved and surpassed this target ahead of time, with an average sugar addition of 14.6% in soft drinks between 2015 and 2019.
“The cooperation with Coca Cola in North America is also effective. In 2019, Coca Cola Zero sugar has achieved double-digit growth for the third consecutive year. ” Perez said.
She pointed out that the sales of small cans continued to maintain “double-digit annual growth”, and Coca Cola’s high-end bottled water business led by smartwater and TOPO Chico also had “strong growth”, which reflected Coke’s efforts to help consumers reduce sugar intake.
“We believe that reducing calories is the winning strategy for the future.” Zhan kunjie once said last year that innovation has accelerated the growth of Coca Cola’s global retail sales, of which 6% was increased in 2018. This growth is largely due to the success of Zero sugar Coca Cola. “This is certainly not achieved overnight. Over time, we have improved and expanded Zero sugar Coca Cola
Although the per capita sugar intake of Chinese consumers is far lower than that of Europe and the United States, the demand for “anti sugar” in China is also strong in recent years, mainly due to the improvement of health awareness and the growing concern of more and more consumers about obesity and skin problems caused by excessive sugar intake.
The snack agent noticed that in the Chinese market, Coca Cola has also launched many sugar free products in recent years, including Coca Cola fiber +, coca cola zero, Sprite fiber +, Sprite zero card, Fanta zero card, Yiquan soda, pure Yueguo water, Chuncha club, etc.
When asked about future sugar reduction targets, Perez replied at the meeting that Coca Cola has been insisting on reducing sugar, “we will continue to do this after 2020. Although we have not set a specific target after 2020, this is something that the team has been discussing and working on. “
Looking ahead, she said, Coca Cola will continue to reduce added sugar by changing the formula and offering smaller portions, and continue its portfolio transformation as a full range beverage company.
When asked about Coca Cola’s plans for healthy drinks, Perez said that Coca Cola focuses on providing products that meet the different needs of consumers every day. Sugar reduction is also included in the issue of healthy drinks, and has been promoted worldwide. As it moves towards a full range beverage strategy, Coca Cola will “continue to explore different products.”.
Later, Timothy K. leveridge, vice president and investor relations officer of Coca Cola, added that Coca Cola was investing more in drinks that were considered essential to its future development, “healthy drinks will be a core part of it.”.
“Consumers want more (healthy) choices, so we’re focused on being able to do that.” He said.