The Coca-Cola reported strong second quarter and year-to-date 2011 operating results, meeting or exceeding long-term growth targets and gaining volume and value share in total NARTD beverages. Reported worldwide volume grew 6 percent in both the quarter and year-to-date. Excluding new cross-licensed brands in North America, primarily Dr Pepper brands, worldwide volume grew 5 percent in the quarter and year-to-date. The company achieved broad-based volume growth in the quarter across each of five geographic operating groups, with growth of 7 percent in Eurasia and Africa, 7 percent in Pacific, 6 percent in Latin America, 5 percent in Europe and 4 percent in North America. Excluding new cross-licensed brands, North America volume was even in the quarter and grew 1 percent year-to-date.
In the quarter and year-to-date, the company grew global volume and value share in NARTD beverages, with share gains across most beverage categories. The company continued to see growth in sparkling beverages, with worldwide brand Coca-Cola volume growth of 4 percent in the quarter driven by a number of global markets, including 24 percent in China, 17 percent in Russia, 7 percent in Mexico, 7 percent in France, 6 percent in Germany and 2 percent in Japan. Worldwide sparkling beverage volume grew 5 percent in the quarter (4 percent excluding new cross-licensed brands in North America), with international sparkling beverage volume growing 5 percent.
Worldwide still beverage volume grew 7 percent in the quarter, led by growth across the portfolio, including juices and juice drinks, sports drinks, ready-to-drink teas, energy drinks and water brands. Still beverage volume in the quarter grew 10 percent internationally and 1 percent in North America. Minute Maid Pulpy continues to expand globally and achieved 35 percent growth in the quarter. Water grew 10 percent in the quarter with a focus on innovative and sustainable immediate consumption packaging like our PlantBottle™ in the U.S. and our Eco Crush bottle for the I LOHAS brand in Japan.
Muhtar Kent, chairman and CEO of The Coca-Cola, said in a prepared statement, “We are pleased with our second quarter performance results. We completed the second quarter of 2011, and the sixth quarter of our 2020 Vision, by delivering results ahead of our long-term growth targets. Importantly, we are delivering these strong results at a time when global macroeconomic conditions are at best mixed. This serves to underscore how, together with our global bottling partners, we are decisively investing in the future and executing our 2020 Vision from a position of real strength.
“Even as consumers around the world continue to feel the impact of a slow economic recovery, they increasingly choose our brands to refresh themselves at a rate of over 1.7 billion servings each and every day. Our strong revenue and profit results, combined with our worldwide share gains and positive price/mix, attest to the strength of our global system. With our 2020 Vision as our roadmap, we continue to sharpen our focus on execution by getting very clear on those priority actions we need to take to deliver in the near term while also preparing for 2020 today.
“During this past quarter, we officially celebrated Coca-Cola’s 125th anniversary. And while it is wonderfully rewarding to celebrate our past, we remain constructively discontent and resolutely focused on our future. Our proven track record of creating value over time is a testament to this dynamic commercial enterprise and business that has just begun to reach its potential. That is why, as we look ahead to 2020 and beyond, we remain confident in our ability to achieve our long-term targets and to deliver sustainable profitable growth and value for our shareowners.”
The North America Group’s volume grew 4 percent in the quarter and 5 percent year-to-date. Excluding new cross-licensed brands, primarily Dr Pepper brands, North America organic volume was even in the quarter and up 1 percent year-to-date, with continued volume and value share gains across total NARTD beverages. Reported net revenue for the quarter increased 141 percent, primarily reflecting the acquisition of CCE’s North American operations. Concentrate sales growth was 3 percent (including new cross-licensed brands). The company achieved 1 percent to 2 percent positive retail pricing in the quarter and remain committed to achieving 3 percent to 4 percent retail pricing in the second half of the year to help offset higher commodity costs. Second quarter reported operating income grew 46 percent. Comparable currency neutral operating income grew 62 percent in the quarter, primarily reflecting the acquisition of CCE’s North American operations and growth in the underlying business, partially offset by higher commodity costs and the timing of marketing expenses as the company conformed the newly acquired North American bottling business to its accounting policies.
Sparkling volume was up 6 percent in both the quarter and year-to-date. Excluding new cross-licensed brands, principally Dr Pepper, organic volume for sparkling beverages declined 1 percent in the quarter and year-to-date, impacted by the cycling of prior year customer-funded promotional activity and a continued challenging economic environment. The company gained sparkling beverage volume and value share in the quarter. Coca-Cola Zero delivered double-digit volume growth for the 21st consecutive quarter, up 12 percent, driven by strong marketing and continuing growth in foodservice. Fanta grew for the fourth consecutive quarter, up 7 percent, with strong retail activation.
North America still beverage volume grew 1 percent in the quarter and 4 percent year-to-date, led by Powerade growth of 9 percent and Gold Peak tea growth of 38 percent in the quarter. During the quarter, the company gained volume share and maintained value share in total still beverages, with volume and value share gains across multiple still beverage categories, including sports drinks, energy drinks, ready-to-drink teas and coffees, and packaged water. Overall, the juice category was soft in the quarter as the company led industry pricing to offset commodity costs, while still growing Simply and expanding the availability of single-serve packaging. Both vitaminwater zero and smartwater continued to grow double digits in the quarter.