Coca Cola is not afraid of the impact of weight loss pills, and traditional Coca Cola beverages are still an important part of the company's business.
On January 18th, James Quincey, CEO of Coca Cola, stated at the Davos Forum that the impact of weight loss pills is not a big deal. Faced with changes in consumer habits, the company has launched a diverse product portfolio to meet market demand, and stated that traditional beverages will continue to be an important component of the company's business.
Since 2023, GLP-1 drugs represented by Danish pharmaceutical giant Novo Nordisk have become popular worldwide due to their weight loss effects. Will weight loss drugs affect the future development of beverage giants like Coca Cola?
"When you analyze the data, I don't think it's a big deal for us," Quincy said. "We sell a full range of beverages with and without calories. Simply put, if you want to lose weight, you can choose to reduce your calorie intake, but ultimately you won't be able to reduce your liquid intake."
However, under the influence of sugar control, many consumer goods companies, from retailers to packaged food manufacturers, are considering how to incorporate the soaring use of weight loss pills into their strategic considerations. Previously, some analysts had also predicted the risks that weight loss pills may bring to snack and beverage companies. All kinds of GLP-1 diabetes drugs produced by Novo Nordisk, Lilly and other pharmaceutical factories are also used by more and more consumers for the purpose of weight loss and appetite suppression.
Quincy said that in recent years, as people have found a balance between calories and sugary drinks, the company's product portfolio has changed. The overall structure of the company's products has begun to shift towards low calorie and zero calorie products, and zero calorie products are continuously and steadily growing, which is also Coca Cola's way of responding to changes.
"We are already working hard to provide people with choices to reduce calorie intake, whether in the United States or other countries, almost every brand line has low calorie or no calorie options." Quincy said that how people want to balance calories is not important because Coca Cola always provides them with choices.
According to Coca Cola's latest Q3 2023 financial report, despite the impact of weight loss pills, Coca Cola still recorded growth that exceeded market expectations. The financial report shows that the company's revenue in the third quarter was 11.953 billion US dollars, a year-on-year increase of 8%, 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 US dollars, a year-on-year increase of 9%; Earnings per share was $0.74, a year-on-year increase of 7%, higher than market expectations of $0.69.
In the third quarter financial report of 2023, Coca Cola also raised its performance guidance for the whole year of 2023, with an expected organic revenue growth rate 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%.
As a classic product of Coca Cola, traditional Coca Cola beverages have always been an important component of Coca Cola's business. However, does the increase in consumer demand for sugar control mean that the proportion of traditional Coca Cola products in the business will decrease?
"In the past few decades, with calorie control, we will see more zero sugar products," Quincy said, "but ultimately, people will still enjoy plain cola." In his view, even ten years later, traditional Coca Cola beverages will continue to be an important component of the company's business.
As of the close of the US stock market on January 18th, Coca Cola rose 0.28% to close at $60.16.