The Coca-Cola Co is happy with its China growth

The Coca-Cola Co is happy with its China growth

A rollout of smaller package offerings has helped The Coca-Cola Co counter China's lowest growth rate in three years, according to company chairman & CEO Muhtar Kent.

Coca-Cola posted 8% volume growth in China for H1 yesterday (17 July), one percentage point above the country's GDP growth rate, Kent told investors on a conference call. Continuing efforts to offer smaller cans and bottles to customers helped drive growth, he said.

“Last earnings call we said China might moderate and our business might not be immune to China's cooling economy,” Kent said. “The right size packaging efforts we've put in place in China last year keep generating consistent and strong incremental growth in transactions.”

Coca-Cola's transactions in China jumped 12% in Q2 and 14% in H1.

Kent said the slowdown had affected the overall beverage business in China and changed customer spread as consumers moved back inland. Many of China's industrial hubs are on its eastern coast, where the economic cooling has been felt most.

However, Kent said other Asian markets have yet to see slowdowns, with sales in South-East Asia remaining strong.

“There's been pretty strong, balanced growth across the region,” Kent said.

Earlier yesterday, Coca-Cola announced healthy H1 results, though net profits slowed in Q2 following a strong Q1 performance. Worldwide volume grew 5% in the year so far, driven by growth in the BRIC countries.

Europe continued to drag growth, and Kent admitted that Germany, with 1% volume growth in Q2, was one of the region's few bright spots.

Euro 2012 hosts Poland and Ukraine also saw volume and value gains following Coca-Cola's sponsorship of the football tournament.