Soda consumption levels are not trending in the right direction if you are Coke (KO), PepsiCo (PEP) or Dr. Pepper Snapple (DPS) — falling to a 30-year low in the United States. Changing taste buds, and consumers desire for healthier alternatives have resulted in flavored waters and juices, not to mention the energy drink and coffee beverage categories, eating into the sugary drink manufacturer’s sales.
At Coke’s management presentation to Barclays Global Consumer Staples Conference, the team presented its strategy for maintaining, if not growing, its business. At the top of its list: tapping into growing international demand ( part of our Rise & Fall of the Middle Class thematic ) and overhauling its ingredients to tap into more natural options ( part of our Foods with Integrity thematic ).
The long-term growth of the beverage industry is being propelled, yes, by globalization, urbanization, the growth of the middle class as much as that gets buffeted in the short term, it is still there as a long-term trend.
Now it is fair to say that the evolution of what we are doing on Coca-Cola and some of the Sparkling beverages is not just about a new campaign or a new graphic identity. It is actually reshaping our Sparkling strategy so that we can sustain growth overtime. It is about responding to the changes in the consumer landscape and the stakeholder landscape in terms of people’s desire whether it be more natural ingredients, whether it be for the desire for less sugar, less calories, more of a treat, we have brought all these pieces together.