The Coca-Cola Company today reported strong third quarter and year-to-date 2012 results, with solid volume and revenue growth, and continued volume and value share gains in total nonalcoholic ready-to-drink (NARTD) beverages, as well as across nearly every beverage category in which the Company competes.
Muhtar Kent, chairman and chief executive officer of The Coca-Cola Company said, "We are pleased with our third quarter and year-to-date results. We continue to deliver consistent and solid performance, with our business growing worldwide volume by 4 percent in the quarter and 5 percent year-to-date. Importantly, we realized growth in the quarter across all five of our global geographic operating groups, despite continued volatility in the worldwide economy. We have been able to crack the calculus for growth in this environment. We have done this by consistently investing in our system and our brands to ensure that our global portfolio is more relevant and healthier today than it has ever been. We remain resolutely focused on ensuring that we leverage our wonderful heritage and fuse it with what is expected by our consumers today in order to earn and sustain our place in their daily lives tomorrow. "
The Coca-Cola Company reported strong worldwide volume growth of 4 percent in the third quarter and 5 percent year-to-date. Volume growth in the quarter was well-balanced around the world, with growth in all geographic operating groups as well as growth across both developed markets (+2 percent) and emerging markets (+7 percent). The Company reported solid growth in key developed markets, including North America (+2 percent), Japan (+2 percent) and Europe (+1 percent), which reported growth across all business units in the quarter. In addition, the Company delivered strong volume growth in key emerging markets such as Thailand (+19 percent) and India (+15 percent) in the quarter. Our China business delivered 2 percent volume growth in the quarter and 6 percent growth year-to-date.
In the third quarter, we grew global volume and value share in total NARTD beverages, with volume and value share gains across nearly every beverage category in which we compete. Brand health remains consistently strong, with continued improvements in favorite brand scores and growth among consumers who enjoy at least one product from our broad portfolio of beverage brands per week. Through our occasion-based brand, package, price and channel segmentation strategy, we remain closely connected to our consumers with a dual focus on recruitment and affordability. Our immediate consumption beverage volume continues to grow, up 4 percent globally in the quarter and 5 percent year-to-date.
Worldwide sparkling beverage volume grew 3 percent in the quarter and year-to-date. This represents nearly 450 million incremental unit cases year-to-date, or the equivalent of adding another Russia to our global business. We grew volume and value share in global core sparkling beverages in the quarter, led by brand Coca-Cola and reflecting a balanced portfolio approach to growth in the core sparkling beverage category. Worldwide brand Coca-Cola volume grew 2 percent in the quarter and 3 percent year-to-date, with growth in the quarter across diverse markets, including India (+34 percent), Russia (+18 percent), Brazil (+3 percent), Mexico (+3 percent) and South Africa (+2 percent). In addition, worldwide Fanta volume grew 7 percent in the quarter and 5 percent year-to-date, and Sprite volume grew 4 percent in the quarter and 5 percent year-to-date, as we leveraged global marketing campaigns in locally relevant ways.
Worldwide still beverage volume grew 10 percent in the quarter and 9 percent year-to-date, with solid growth across beverage categories, including packaged water, juices and juice drinks, ready-to-drink tea and coffee, sports drinks and energy drinks. Excluding the impact of acquisitions, still beverage volume grew 8 percent in the quarter and year-to-date. We grew global volume and value share in total still beverages and delivered share gains across all still beverage categories in which we compete. Ready-to-drink tea volume grew 13 percent in the quarter, with continued strong performance of key brands such as Gold Peak and Honest Tea in North America, Ayataka green tea in Japan and Fuze Tea, which we continued to expand across markets worldwide during the quarter. Packaged water volume grew 10 percent in the quarter, driven by our focus on innovative and sustainable packaging and immediate consumption occasions, most recently with our new "PlantBottle with a Twist" campaign, first aired during the summer 2012 Olympic Games. Energy drinks volume grew 19 percent in the quarter driven by growth across our global portfolio of energy brands.
- All references to growth rate percentages, share and cycling of growth rates compare the results of the period to those of the prior year comparable period.
- "Concentrate sales" represents the amount of concentrates, syrups, beverage bases and powders sold by, or used in finished beverages sold by, the Company to its bottling partners or other customers.
- "Sparkling beverages" means NARTD beverages with carbonation, including energy drinks and carbonated waters and flavored waters.
- "Still beverages" means nonalcoholic beverages without carbonation, including noncarbonated waters, flavored waters and enhanced waters, juices and juice drinks, teas, coffees, sports drinks and noncarbonated energy drinks.
- All references to volume and volume percentage changes indicate unit case volume, except for the reference to volume included in the explanation of net revenue growth for North America. This North America volume represents Coca-Cola Refreshments' unit case sales (which are equivalent to concentrate sales) plus non-Company-owned bottling operations' concentrate sales. All volume percentage changes, unless otherwise noted, are computed based on average daily sales. "Unit case" means a unit of measurement equal to 24 eight-ounce servings of finished beverage. "Unit case volume" means the number of unit cases (or unit case equivalents) of Company beverages directly or indirectly sold by the Company and its bottling partners to customers.
- Year-to-date 2012 financial results were impacted by one less selling day. Fourth quarter 2012 financial results will benefit from two additional selling days. Unit case volume results are not impacted by the variance in selling days due to the average daily sales computation referenced above.
- Due to the refocusing in 2012 of the Beverage Partners Worldwide (BPW) ready-to-drink tea joint venture with Nestlé S.A. (Nestlé), we have eliminated the BPW joint venture volume and associated concentrate sales from our reported results for both 2011 and 2012 in those countries in which the joint venture is being phased out during 2012. In addition, we have eliminated the Nestea licensed volume and associated concentrate sales in the U.S. due to our current U.S. license agreement with Nestlé terminating at the end of 2012. These changes did not materially impact the Company' s reported volume results for third quarter or year-to-date 2012 on a consolidated basis or for any individual operating group. However, these changes increased the Company's reported third quarter and year-to-date 2012 volume for still beverages by 2 points and 1 point, respectively, and ready-to-drink tea by 12 points and 8 points, respectively.
- The Company reports its financial results in accordance with accounting principles generally accepted in the United States (GAAP). However, management believes that certain non-GAAP financial measures provide users with additional meaningful financial information that should be considered when assessing our ongoing performance. Management also uses these non-GAAP financial measures in making financial, operating and planning decisions and in evaluating the Company's performance. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP. Our non-GAAP financial information does not represent a comprehensive basis of accounting.