On October 24th, Coca Cola released its financial report for the third quarter of 2023. According to the financial report, Coca Cola's revenue in the third quarter was 11.953 billion US dollars, an increase of 8% year-on-year, exceeding market expectations of 11.43 billion US dollars; The operating profit was 3.27 billion US dollars, a year-on-year increase of 6%; The net profit was $3.083 billion, a year-on-year increase of 9%.
In the third quarter, we achieved steady growth and revised our annual performance guidelines based on our year-to-date performance, "said James Quincey, Chairman and CEO of Coca Cola
Tightly connected to young consumers
The financial report shows that Coca Cola's "full range beverage" strategy has achieved significant results. From a specific category perspective, the global sales of carbonated beverages increased by 2%, mainly driven by growth in the Latin American and Asia Pacific markets. The flagship brand "Coca Cola" saw a global sales growth of 2%, mainly driven by growth in the Latin American and Asia Pacific markets; The global sales of sugar free "Coca Cola" increased by 3%; The global sales of flavored soda increased by 1%, mainly driven by the growth of the Latin American, Asia Pacific, and North American markets.
It is worth noting that driven by growth in the Chinese market such as Meijuyuan Fruit Orange, Coca Cola's global sales of juice drinks, dairy products, and plant-based beverages increased by 2% in the third quarter. In addition, Coca Cola's main bottled water, sports drinks, coffee, and tea sales grew by 1% globally. Among them, driven by the strong growth of Costa Coffee in the UK and Chinese markets, coffee sales globally increased by 6%.
Regarding the Chinese market, Coca Cola Chairman and CEO Zhan Kunjie stated on the financial report conference call, "We still have a lot of room for development in the Chinese market in terms of carbonated beverages, revenue growth management, and execution. We need to seize the opportunity to showcase our skills during the upcoming Spring Festival in early 2024
It is reported that in the third quarter of this year, Coca Cola accelerated its empowerment of the Chinese market, continuously investing in product innovation, brand building, drinking scenarios, and exploring market growth possibilities. At the same time, it also strengthened its connection with the young consumer group.
In September of this year, Coca Cola's global creative platform "Le Chuang Wujie" launched the first sugar free Coca Cola "The Next 3000 Years" jointly created by artificial intelligence (AI) in the Chinese market, opening up people's infinite imagination of the future world. In terms of communication with consumers, Coca Cola has teamed up with domestic intelligent technology brand Xiaodu to cleverly combine Coca Cola's brand concept with Generative Artificial Intelligence (AIGC) technology, using interactive experiences that are popular among young people as a touchpoint to establish a bridge for communication with more young groups.
With the development of the times, young people have gradually become the main force of consumption, and Coca Cola has actively embraced and satisfied the new generation in recent years, which has also promoted its performance growth in China. "Zhu Danpeng, a senior researcher at the China Food Industry Research Institute, told Securities Daily.
Continuously increasing investment in China
In the face of diversified market demand and in order to reach more consumer groups, Coca Cola continues to strengthen its supply chain construction. In the third quarter, Coca Cola, together with two major bottling partners - COFCO Coca Cola and Taikoo Coca Cola, continued to increase its local investment efforts to promote its presence in China and promote sustainable business growth.
On September 20th, Suzhou Taikoo Coca Cola officially broke ground in Kunshan Development Zone, with a total investment of 2 billion yuan, making it the largest strategic investment of Taikoo Coca Cola in China to date. Suzhou Taikoo Coca Cola will be built into a modern chemical plant in East China that integrates production, distribution, and regional sales headquarters, and will be completed and put into operation by the end of 2025.
Not only that, Taikoo Coca Cola also announced that it is expected that the total investment of Taikoo Coca Cola in mainland China will exceed 12 billion yuan in the next decade.
In addition, the Guizhou factory of COFCO Coca Cola, which was put into operation in July last year, is also steadily developing. This is the 20th factory of COFCO Coca Cola and the 46th factory in the Coca Cola China system. Over the past year, the factory has built three advanced intelligent automated production lines, with an annual production capacity of approximately 300000 tons. As of June this year, the factory's business has covered all prefecture level cities and counties in the province, providing consumers with 9 categories and 25 brands of products.
The investment and construction of Coca Cola's Chinese bottling partners reflects Coca Cola's trust in and confidence in the Chinese market, "said Zhu Danpeng.
The impressive performance in the third quarter allowed Coca Cola to improve its annual performance guidance based on its year-to-date performance. In its third quarter financial report, Coca Cola stated that it expects the growth rate of organic revenue for the entire year of 2023 to be in the range of 10% to 11%, higher than the previously expected range of 8% to 9%; The growth rate of earnings per share has been raised to the range of 7% to 8%, higher than the previously expected range of 5% to 6%.