Coca-Cola sales not fizzing as too few ‘Share a Coke’

Video: “Share a Coke” 2014 TV advert

http://www.youtube.com/watch?v=duh2lELaju4

Coke launched its second ‘Share a Coke’ campaign in June and backed it with a nationwide push last month (17 July), claiming ads will be seen by approximately 94 per cent of the population 20 times over the summer period.

However, retail sales of the Coca-Cola drink tumbled 2.1 per cent year-on-year to £667.47m in the 52 weeks to the 19 July, IRI data shows. Volumes (number of litres) suffered a 6.2 per cent drop to 580.52 million in the period.

Neither the sun nor the World Cup provided a reprieve with value sales and volumes plummeting 8.8 per cent and 11 per cent respectively to £159.62m and 138.29 million litres in the 12 weeks to 19 July. Diet Coke also suffered with sales for the year down 3.3 per cent to £465.99m and 1.8 per cent to £120.45m in the quarter.

The latest sales performance, however, is against tough comparisons in 2013 when the ‘Share a Coke’ personalisation mechanic had an immediate impact. Coke’s campaign lifted sales 7.8 per cent to £174.98m in the 12 weeks to 20 July 2013. Initial demand pushed sales up to £682.13m for the 52 weeks to 20 July 2013, according to IRI, as the brand exploited its popularity to drive sales of the higher value single bottles.

Tim Eales, strategic insight director at IRI, says, “strong” single pack sales in the calendar year 2013 demonstrate the “Share a Coke” campaign has had some success. Coca-Cola single packs were its fastest growing product in the year to January, revealed IRI, a trend that led to 330ml cans, 375ml and 500ml bottle sales rising monthly from £27.7m to £41.7m for the four weeks to 19 July.

The drinks maker has been using the campaign to shift its bottles around impulse occasions, adds Eales, while heavily promoting on multi-packs and bigger bottles to carry momentum in convenience stores over to larger shopper trips.

“It’s clear that Coke sales are deteriorating but the ‘Share a Coke’ campaign has been a success moving the single pack end of the business forward”, says Eales. “Additionally, there were three weeks of fabulous weather last July off the back of some really poor conditions which delivered monster sales for the FMCG sector, particularly for soft drinks. That month skews the data slightly.”

Coke’s focus on securing premium sales left it open to Pepsi’s deep discounting outmuscling its blend of brand marketing and multi-pack promotions. Pepsi sales rocketed 12.1 per cent year-on-year to £213.26m in the 52 weeks to 19 July, found IRI. Volumes leapt 9.7 per cent to 275.79 litres in the period.

IRI says around 80 per cent of those sales were from promotions, allowing the brand to benefit from the World Cup windfall. Shoppers spent more  on FMCG goods throughout the tournament to take advantage of the evening kick-off games. Sales climbed 8.8 per cent to £50.29m in the three months to 19 July, while volumes rose 8.1 per cent to 63.13 litres. The tactic translated over to Pepsi Max too with sales for the year rising 11.8 per cent to £206.34m and up 10.4 per cent to 256.57 litres for the quarter.

While still trailing Coke in terms of size, Pepsi is using its lower price point – 80p per litre compared to Coke’s £1.15p – to appeal to shoppers increasingly searching for bargains in-store.

Eales adds: “In 2013 people were managing their spend on grocery by buying at cheaper stores as well as buying lower priced products within their normal stores. This trend of people trading down cost the industry £800m last year but Pepsi has been able to benefit from it. They are dealing deeper [than Coke], which is helping to bring there already low price point lower and ultimately convince people to switch down from the higher-priced Coke.”

Coke declined to comment on the sales data.