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The Coca-Cola Co. (NYSE: KO) has been facing an unavoidable problem for almost a decade: Americans are drinking less soda.
According to Beverage Digest, soda sales in the U.S. dropped 3% in 2013, which was worse than the 1.2% drop it experienced in 2012. The publication noted that soda sales have fallen for nine consecutive years.
Sales are down again in 2014. Citi Research reported that U.S. store sales of soda had dropped 1.9% in the first 12 weeks of the year.
Those numbers hit even closer to home this week when Coca-Cola reported that its total soda sales were down globally for the first time in 15 years in the first quarter. Global sales had been buoying Coca-Cola's revenue, but even international sales dipped this quarter.
But while slowing soda sales also affect other beverage companies like PepsiCo Inc. (NYSE: PEP) and Dr. Pepper Snapple Group Inc. (NYSE: DPS), Coca-Cola's response is not giving investors confidence in KO's future…
Coca-Cola Sticks Up for Soda
Rather than focusing on the other beverages in its product portfolio, Coca-Cola is throwing its full support (and marketing budget) behind its sugary namesake.
"Coca-Cola remains magical. We need to work even harder to enhance the romance of the brand in every corner of the world," Coca-Cola Chief Executive Officer Muhtar Kent told investors in February.
Romance aside, Coke's sales are slipping. In 2013, Coca-Cola sales were down 0.5%. And while Coke remains the top-selling U.S. soda, the brand has sold less of its namesake every year for 13 straight years.
To offset these falling sales totals, Coca-Cola is doing more advertising around the full-calorie soft drink. According to The Wall Street Journal, Coke will increase its global advertising spending by $1 billion through the next three years. That's up from the $3.3 billion it spent last year.
But while Coca-Cola increases ad spending, it's facing yet another troubling statistic…
,, Coca-Cola is throwing its full support (and marketing budget) behind its sugary namesake.
What a laugh , it is not sugar ,but corn syrup ..
I will not touch this stock for yrs now that they are giving the customer low grade soda , thier stock holders a devalued dividend for the sake of their new bonuses ..
The sales of Diet Coke will never go up. After a 33 page protest on aspartame by the National Soft Drink Assn (now American Beverage) Coke knowing aspartame was unsafe and dangerous turned around and lobbied for NutraSweet. Read the protest in the congressional record on http://www.mpwhi.com Also read Rotgut Aspartame: Methanol Mania. Dr. Alemany who did the study in Barcelona, Trocho, showing the fformaldehyde from the methanol embalms living tissue and damages DNA ttold me aspartame will murder 200 million. What do you think Coke deserves? Dr. Betty Martini, D.Hum, Founder Mission Possible Intl – warning the world off aspartame