Round-Up with Russell - The Week in Soft Drinks
A round-up of the week's soft drinks news
just-drinks has just 'flown' in from the Zenith 2011 UK Bottled Water Industry Conference, in Bath, where a line-up of speakers included Nestle Waters UK, managing director, Paolo Sangiorgi, and European Federation of Bottled Waters' president, Hubert Genieys.
The mood was upbeat and many of those that filled the Bath Spa Hotel were fresh from a recent bottled water conference in Rio de Janeiro, and so ready to debate current issues facing the industry.
Zenith International's chairman, Richard Hall, fuelled debate amongst delegates with the suggestion of global standards for the bottled water industry, which would cover the environment, social contribution and generic marketing campaigns.
Hall suggested that global protocol for the industry could include recycling requirements and labelling. It could also include companies offering up to 5% of their advertising spend towards an industry-wide marketing campaign to promote bottled water.
Hall also sparked debate over the exemption of all waters from VAT or other sales taxes. The industry will have to wait for the Italian Mineral Water Industry Conference in Venice on 7 March 2012 to discuss this further.
The week also saw the tail-end of nine-month results from a number of soft drinks firms, namely Coca-Cola Bottling Co Consolidated, Coca-Cola Hellenic, Jones Soda and Jamba Juice.
Coca-Cola Consolidated saw the trends that it experienced in the first half of 2011 continue in the third quarter with a 17.6% drop in profits. Like most soft drinks companies, the firm's results were hit by an increase in raw materials costs.
Coca-Cola Hellenic however, remained upbeat about its future, despite recording a drop in nine-month profits. The Greece-based bottler conceded that it sees more challenges for Greece as a result of the slow implementation of austerity measures. Nonetheless, despite operating in a somewhat volatile environment, the company is continuing to focus on growing margins.
Jones Soda, which recently experienced a change of CFO, saw its net losses grow in the first nine months of the year, due to the discontinuation of a number of underperforming lines. The results may come as a surprise given that the US soft drinks firm had managed to improve its net losses in the first-half of the year.
In the innovation arena, The Coca-Cola Co has launched a marketing campaign in Malaysia featuring what it claims is the world's largest full-colour LED wall screen. Jamba Juice rolled out an Apple Cinnamon Cheer Smoothie in time for the festive period, while Kraft Foods is reportedly preparing to launch an energy version of its MiO drinks concentrate.
Elsewhere, PepsiCo continued to make headlines and fuel speculation of internal unrest with an announcement on the extended deadline of its business review, which, when published, will include guidance for 2012. The company did not give a reason for the delay in publication, which had been expected in December, but follows speculation that board members have become frustrated by the lack of a potential successor to CEO. Members have cited flat stocks and a less than successful push into healthier snacks and beverages as areas of concern.
While PepsiCo recorded a 4.1% increase in third-quarter profits last month, the company's stocks have dropped by 4.3% so far this year. Add to this a recent leadership shuffle and the formation of a 'council', and it all points to interesting times head for the soft drinks and snacks giant.
PepsiCo was never going to win many prizes for its first-quarter showing, but management is keen to show that its mammoth restructuring plan is a case of 'so far, so good'....
PepsiCo has been forced to withdraw 277 Tropicana Kids Orange Juice multi-packs in the UK due to contamination....
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