Coca-Cola Co. reported strong full-year and fourth quarter 2011 operating results, once again meeting or exceeding its long-term growth targets and gaining full-year volume and value share in total nonalcoholic ready-to-drink (NARTD) beverages as well as in both sparkling and still beverages. The company’s strong 2011 performance, combined with its optimized and advantaged system, positions it well to deliver long-term, sustainable growth.
Muhtar Kent, chairman and chief executive officer of The Coca-Cola Co., said in a prepared statement, “Today, I am pleased to share that The Coca-Cola Co. continues its momentum toward realizing our 2020 Vision, with stronger brands, clear strategies and well-focused execution to drive further growth. We once again achieved financial results for both the year and the quarter in line with, or ahead of, our long-term targets, with quarterly volume and revenue growth in every one of our five geographic operating groups. Importantly, we also continued to increase our global volume and value share in 2011.
“Even as we believe that global market volatility will continue in the near term, the breadth of our global footprint and the strength of our brands create a resilient business that was built for times like these. As we enter into the third year of our 2020 Vision, our Roadmap for Winning Together remains clear. The assumptions that shaped our 2020 Vision have not changed. Our expectations for long-term, sustainable and balanced growth across emerging and developed markets have not wavered. And we will continue to make significant investments in our future all around the world to support the tremendous opportunity we see in nonalcoholic ready-to-drink beverages, one of the fastest growing segments in consumer packaged goods.
“In a world looking for hope, optimism and renewal, Coca-Cola is privileged to be refreshing a thirsty world. Our solid performance reflects the continued investments we have made over time and in every economic condition to strengthen the health of our brands, starting with brand Coca-Cola, the very oxygen of our business. With our well-aligned global bottling system, world-class brands, strong financial discipline and a clear roadmap for growth, we are confident that we will achieve our long-term growth targets and continue to deliver increasing shareowner value. We truly believe we are just getting started and that our best and brightest days lie ahead. Thank you for your continued trust and confidence in The Coca-Cola Co."
The company reported worldwide volume growth of 5 percent for the full year and 3 percent during the quarter. Excluding new cross-licensed brands in North America, primarily Dr Pepper brands (which the company began distributing Oct. 2, 2010), worldwide volume grew 4 percent for the full year, at the high end of our long-term growth target. Volume growth for the full year was well-balanced across the globe, with solid growth in key developed markets like North America, Japan and Germany and double-digit growth in key emerging markets like India and China.
In addition, solid growth continued in countries with per capita consumption of company brands less than 150 8-ounce servings per year, with volume up 6 percent for the full year and 4 percent in the quarter. For both the full year and the quarter, the company grew global volume and value share in NARTD beverages, with volume and value share gains across most beverage categories. Further, our immediate consumption beverages were up 4 percent globally in 2011, driven by focused in-store activation efforts and cold drink equipment expansion.
The company continued to see growth in sparkling beverages, with gains in global volume and value share for the full year and in the quarter. This growth was driven by continued focus on and investment in our brands, starting with brand Coca-Cola.
Brand Coca-Cola volume grew 3 percent in both the full year and the quarter, with strong growth in the fourth quarter in a number of markets around the world, including 33 percent in Thailand, 15 percent in India, 13 percent in China, 12 percent in Argentina, 9 percent in Germany, 8 percent in Russia, 4 percent in both Mexico and France, and 3 percent in Japan.
Worldwide sparkling beverage volume grew 2 percent in the quarter, with international sparkling beverage volume up 3 percent as we continue to focus on innovative, globally scaled marketing campaigns. For the full year, worldwide sparkling beverage volume grew 4 percent, with new cross-licensed brands in North America, primarily Dr Pepper brands, contributing one percentage point of this growth.
Worldwide still beverage volume grew 8 percent for the full year and 6 percent in the quarter, led by growth across the portfolio, including ready-to-drink teas, juices and juice drinks, energy drinks and water brands. International still beverage volume grew 10 percent for the full year and 7 percent in the quarter, and North America still beverage volume grew 4 percent for the full year and 3 percent in the quarter.
The company grew global still beverage volume and value share for the full year. In the quarter, we grew global still beverage volume share and successfully held value share as consumers continue to experience macroeconomic volatility. Minute Maid Pulpy continues to expand globally, with 20 percent volume growth in 2011.
Energy drinks volume grew 19 percent in the quarter with broad distribution of the Burn energy brand, which is now available in nearly 80 countries.
Water volume grew 7 percent in the quarter as the company continues to focus on innovative and sustainable immediate consumption packaging like our PlantBottle™ in North America, which is driving new customer listings, and I LOHAS/Ecoflex lightweight crushable bottle for water brands in Asia and Latin America.
Packaging innovations like these underscore commitment to ensure the long-term sustainability of packaged water business and focus on reducing the carbon footprint.
The North America Group’s volume grew 1 percent in the quarter and 4 percent for the full year. Excluding new cross-licensed brands, primarily Dr Pepper brands, North America’s organic volume grew 1 percent for the full year, with volume and value share gains in total NARTD beverages as well as in both sparkling and still beverages. Reported net revenue for the quarter increased 4 percent, reflecting “as reported” volume growth of 2 percent, which includes the benefit from one additional selling day in the quarter, as well as positive 2 percent price/mix.
Price/mix for the quarter reflects retail pricing of 4 percent in sparkling beverages through the ongoing effective execution of our occasion-based brand, package, price and channel strategies, partially offset by product mix. Fourth quarter reported operating income grew 487 percent, primarily reflecting the cycling of the elimination of intercompany sales upon consolidation of CCE’s former North America operations in fourth quarter 2010.
Comparable currency neutral operating income grew 25 percent in the quarter due to timing of marketing expenses as we cycled higher marketing expenses from fourth quarter 2010 after the acquisition of CCE’s former North America operations.
Reported net revenue for the full year increased 84 percent, primarily reflecting the acquisition of CCE’s former North America operations. The company achieved 1 percent positive pricing to retailers for the full year, driven by 2 percent positive pricing on sparkling beverages. Full-year reported operating income grew 52 percent. Comparable currency neutral operating income increased 44 percent for the full year, primarily reflecting the acquisition of CCE’s former North America operations and growth in the underlying business, partially offset by higher commodity costs.
Sparkling beverage volume was even in the quarter, cycling 1 percent growth in the prior year quarter, and reflecting brand Coca-Cola growth of 1 percent. For the full year, sparkling beverage volume grew 3 percent.
Excluding new cross-licensed brands, principally Dr Pepper brands, organic sparkling beverage volume declined 1 percent for the full year, as pricing to retailers on sparkling beverages increased 2 in 2011. Importantly, the company gained sparkling beverage volume and value share in the quarter, driven by a fully integrated Open Happiness holiday campaign, including our ongoing Arctic Home program, and a strong focus on occasion-based brand, package, price and channel strategies.
Coca-Cola Zero grew high single digits in the quarter and 11 percent for the full year, its fifth consecutive year delivering double-digit volume growth, driven by strong marketing and continuing growth in the foodservice channel. Both Mello Yello and Seagrams continued their double-digit growth in both the quarter and the full year.
North America still beverage volume grew 3 percent in the quarter and 4 percent for the full year, led by Powerade growth of 11 percent in the quarter. Still beverage volume in the quarter also benefited from double-digit growth in Gold Peak tea, vitaminwater zero and smartwater.
During the quarter and full year, the company gained volume and value share in still beverages, with volume and value share gains across multiple still beverage categories, including sports drinks, energy drinks, ready-to-drink teas and packaged water. The company also gained share in juices and juice drinks in both the quarter and the full year. Still beverage volume share has now grown for seven consecutive quarters.
