Coca-Cola to hold marketing spend in countries with slow vaccine rollouts
The beverage giant saw a boost to sales resulting in a 5% year-on-year increase in revenue to $9bn (£6.4bn), as CEO James Quincey credits the actions Coca-Cola took during the pandemic in helping its recovery.
Coca-Cola warned marketing spend will be put on hold for markets with slower Covid-19 vaccination programmes and rising cases.
Speaking on its Q1 2021 results call this afternoon (19 April) Coca-Cola’s CEO James Quincey said pandemic-related lockdowns continue to impact markets, which could greatly affect how it distributes marketing spend over the coming year.
“If we see demand is coming in at the higher end and more reopenings [of markets] happen quickly and revenue starts accelerating, we will also likely re-accelerate the restitution of marketing spend,” Quincey said.
“Conversely, if for whatever reason revenue starts to look a little weaker, then we are likely to hold back on some of the marketing. I think it’s important you view the rest of the year not as normal times, but one where we have to think about how we are using the resources judiciously, in wanting to invest to drive growth and get back to normal.”
Coca-Cola signalled its intent last quarter to bring marketing investment back to pre-pandemic levels to regain lost ground. The beverage giant spent around $4.3bn (£3bn) on marketing in 2019.
Signs of recovery
Coca-Cola’s net revenues grew 5% to $9bn (£6.4bn) during the first quarter. This rise was helped by markets like China, where foot traffic has almost returned to pre-pandemic levels and Quincey said the business was reassured the steps it has taken since the onset of the pandemic are helping it to recover at pace.
In the Chinese market, the brand will continue “re-energising” the market with a “big push into digital engagement” and ecommerce where the brand is seeing success.
It’s important you view the rest of the year not as normal times, but one where we have to think about how we are using the resources judiciously.
James Quincey, Coca-Cola
“In markets at the forefront of recovery, we’ve seen early signs that our actions taken during the pandemic are helping us outpace recovery. It’s important to note, the path to a full recovery remains asynchronous around the world.
“Many markets haven’t yet turned the corner and are still managing through the restrictions. Looking around the world in the Asia Pacific, China continues to lead first quarter ahead of 2019 results and foot traffic almost back to pre-pandemic levels,” said Quincey.
Earlier this month, Coca-Cola unveiled a new look for its original and Diet Coke variants, bringing them in line with its recently revamped Coca-Cola Zero Sugar packs. Quincey said the move, which is part of its ongoing ‘One Brand’ strategy, was “influenced by consumer insight” and its “focus on positive improvement”.