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Coca-Cola to Scrap Around 200 Drink Brands Due to Falling Sales During Lockdown

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Lucy Nicholson/Reuters

Coca-Cola will discontinue about 200 drink brands, halving its portfolio, according to its earnings call on Thursday.

What We Know:

  • During an analyst call, CEO James Quincey stated that they didn’t name the brands it would scrap. Still, it will likely remove more brands from its “hydration” category, including brands like Dasani, Powerade, and Smart Water.
  • Since June, the company has mentioned it will discard drinks such as TabZico, and Odwalla.
  • Coca-Cola’s profits are dominated by its most famous brands, Coke, Sprite, and Fanta. Quincey said more than half of the company’s brands collectively generate just 2% of its revenue in July.
  • Due to this, Coca-Cola has selected to terminate specific brands so it can make sure drinks with the most substantial potential to expand their consumer bases increase frequency and drive system margins, it said.
  • Despite terminating some brands, the company stated it will continue to search for new beverage categories. It started its Topo Chico Hard Seltzer in Latin America in the third quarter through an agreement with Molson Coors Beverage Co. and will launch the product in the US in the first half of 2021.

  • In the quarter to September, Coca-Cola stated that net revenues declined 9% to $8.7 billion because of a drop in out-of-home drinking, as restaurants in some areas remained shut, and fewer people dined out. Sales had recovered in the previous quarter, the company mentioned, but at a slower rate.
  • The company still beat revenue expectations, with revenues around $300 million higher than analysts had prognosticated. Unit sales, which don’t include currency variations, fell by just 4%.

Water and sports-drink volumes, the category Quincey said could face further cuts, fell 11%. The company attached this to a drop in water brands. The company said the ultimate impact of the pandemic on its near-term results was “unknown,” and Quincey mentioned, “many challenges still lie ahead”.

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Business

Under Armour Launches Curry Brand

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Under Armour is launching an offshoot brand for their biggest star athlete: Stephen Curry.

What We Know:

  • Under Armour announced the launch of Curry Brand on Monday. Steph Curry and Under Armour have a longstanding relationship and he is their most visible and popular athlete.
  • The new line will feature athletic apparel for a number of sports, mainly basketball and golf. Curry Brand’s first basketball sneakers will be available starting December 11. Curry has said that playing multiple sports growing up was a big part of his development.

“I always played other sports, got exposed to a lot of different skill sets and people, and that was big in my development. I feel like whatever a kid is interested in, we want to be able to present an opportunity to kind of live that out. We are going to start with basketball, and we want to make sure we have the product, programming and the arenas they would be able to go to and participate and hopefully scale out and brand out from there.” – Steph Curry

  • Under Armour hopes that Curry Brand will help them reach younger consumers like their competitor Nike. According to Piper Sandler’s biannual survey, Nike is far and away the favorite apparel brand for teens whereas Under Armour is on the “no longer worn” list.
  • Curry Brand will act similar to Nike’s relationship with the Jordan Brand. Michael Jordan was the face of the NBA and Nike for a long time and Jordan Brand has become one of the most iconic brands of all time. Under Armour is hoping that Curry’s status as one of the best and most popular players in the NBA will help the brand grow.
  • Curry has played his entire career with the Golden State Warriors and is largely recognized as the greatest shooter of all time and one of the best players ever. He is a two-time league-MVP and three-time NBA Champion. He will also be the highest-paid player in the NBA this season, slated to earn just over $43 million for 2020-2021.

The Curry Brand will also partner with the Oakland Unified School District and Positive Coaching Alliance to improve youth access to sports, particularly in lower-income communities.

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Thanksgiving Day Online Sales Hit Record $5.1 Billion

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As the coronavirus pandemic continues into the holidays, many shoppers are turning to online retail. This influx of customers has led to record sales. 

What We Know: 

  • According to Adobe Analytics data, Thanksgiving Day sales hit a new record. Thanksgiving saw a record $5.1 billion spent, increased spending of almost 22% from last year. Adobe analyzed traffic and transactions from 80 of the top 100 U.S. online retailers. 
  • To precaution traditional holiday traffic, many retailers have extended their Black Friday deals. Stores have done this in hopes of discouraging customers from rushing into stores for only one day. 
  • Customers seem to be avoiding stores all together by buying online. The Adobe Analytics Holiday Forecast 2020 predicts that online holiday spending will surpass $189 billion this year. In surveys conducted by Adobe, one-third of customers will be done with their holiday shopping by Black Friday. In another survey, Adobe predicts that 51% of customers plan to support small businesses on Small Business Saturday. 
  • Taylor Schreiner, Director of Adobe Digital Insights, commented, “We are seeing strong growth as consumers continue to move shopping from offline to online this year. New consoles, phones, smart devices, and TVs that are traditional Black Friday purchases are sharing online shopping cart space this year with unorthodox Black Friday purchases such as groceries, clothes, and alcohol, that would previously have been purchased in-store.” 
  • Black Friday also saw new records. Customers spent $9.03 billion this year compared to last year’s $7.4 billion. This is an increase of 21.6% from last year. Hot items include video game consoles and videogames, LEGOs, Barbies, Hot Wheels, and technology such as Airpods, Apple Watches, Amazon Echos, Samsung TVs, and HP Laptops. 

With the pandemic staying persistent into the winter, it seems that more customers will gravitate towards online shopping rather than the traditional brick and mortar option. Overall, Adobe predicts a 20% to 30% increase in online sales from last year. 

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Florida Walmart Evacuated after Black Friday Parking Lot Fire

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Hernando County Sheriff's deputies evacuated the Brooksville, Florida, Walmart after a fire in a parking lot close to the building. Hernando County Sheriff's Office

Black Friday got off to a real blow-up in Florida due to a trailer exploding outside a Walmart just a few minutes after opening for deal seekers.

What We Know:

  • Hernando County Sheriff’s office described that a sheriff’s officer was already located outside the store in Brooksville to control a possible stampede of customers when he heard an explosion just after Walmart opened at 5 am.
  • After hurrying to the scene and reviewing the three parked tractor-trailers, the deputy was able to help the only occupant to safety. The fire seemed to have started in one of the trailers, then spread to the nearby two trailers as fire squads arrived at the scene.

  • The department stated in a Facebook post:

“As other deputies arrived on scene, they responded to the store to assist with evacuating the store, as the three tractor-trailers were parked very close to the building.”

  • Officials later stated in a post that after the fire was extinguished, customers were finally allowed in at 8 am, three hours after the original opening time.
  • The sheriff’s office mentioned it was not clear what caused the explosion, which is still being investigated. Fortunately, there were no injuries as a result of the explosion/fire.
  • It was not immediately known how many customers had been trying to get into the store at the time, with many reports perceiving there was not the usual rush of deal seekers this year among the pandemic.

According to Adobe Analytics, which measures sales at 80 of the top 100 US online retailers, Black Friday was predicted to generate $10 billion in online sales, a 39 percent boost from last year. On the Monday after Thanksgiving, Cyber Monday is expected to remain the biggest online shopping day of the year with $12.7 billion in sales, a 35 percent jump.

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