Coca-Cola reports decline in quarterly revenue, adopts refreshed marketing approach
Coca-Cola recently reported its largest decline in quarterly revenue in at least 25 years. The soda giant’s weak performance comes after stronger numbers from rival PepsiCo, which has been boosted by its snacks arm. However, the company says it has seen demand improve as global coronavirus restrictions ease.
Coca-Cola reported a quarterly net sales drop of 25% to $7.2bn for the three months to June, indicating that sales have been affected by the coronavirus-led closure of restaurants, bars, cinemas and sports venues – which account for around half its business.
Coca-Cola chairman and chief executive, James Quincey, told investors that the business wants to emerge from Covid-19 in a stronger financial position, which will be supported by a “refreshed marketing approach”.
“We thought no marketing was going to make much difference in Q2. So we pulled back heavily. We’ll have to gauge and be adaptable as we work through the known unknowns as to which markets it’s going to make sense to invest in from now on,” Quincey told investors.
Quincey noted that the brand would continue to be “judicious” about its marketing expenditure and that it would spend more on ads as economic conditions improved, which will include “a step-change in marketing investment effectiveness and efficiency” according to a statement from the business.
During a separate event, John Murphy, chief financial officer at Coca-Cola, warned that while some marketing investment will return to pre-Covid levels, the business still needs to be “flexible” and able to adapt its media strategy as events unfold.
Coca-Cola is one of the world’s largest advertisers, with data from Learnbonds indicating that it spent $4.24bn on marketing in 2019.
Recall that Coca-Cola braked hard on advertising in the second quarter of the year, following the outbreak of the coronavirus pandemic, and specifically paused all social media advertising for 30 days.
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