The Coca-Cola Co. expects its growing e-commerce sales to play a key role as the beverage company weathers coronavirus pain in upcoming quarters and countries begin to ease their lockdowns, executives said April 21.
The beverage company's e-commerce sales are surging with the growth rate doubling in many countries, said James Quincey, Coca-Cola's chairman and CEO, during a post-earnings call April 21. Coca-Cola has been accelerating its e-commerce presence recently compared to before the coronavirus crisis, Quincey said. Coca-Cola's packaged drinks and its concentrates can be purchased online.
"We'll also embrace some seismic consumer behavior shifts that are taking place, especially in e-commerce," Quincey said. "We believe the accelerating expansion of the channel is sustainable, and we want to continue to be well-positioned for long-term growth."
Coca-Cola is investing in digital advertising and piloting several digital initiatives to capture commercial business and consumer sales online, Quincey said.
"We're seeing good results in these early days and are looking to scale similar partnerships with more customers," Quincey said.
E-commerce sales are a small part of the company's total beverage sales but the spike has not been enough to offset the declines of soda purchases at restaurants and convenience stores, a category typically makes up about half of Coca-Cola's business, Quincey said.
The company's first-quarter earnings beat Street expectations, but Coca-Cola expects declining sales of drinks for immediate consumption to have a material impact on its second-quarter results. Coca-Cola withdrew its fiscal 2020 outlook in March.
Quincey said he expects to see social distancing measures in place into the third quarter and possibly into the fourth.
"Those knowns unknowns are out there, and we can't determine which way they're going to take us," Quincey said. "While there are some learnings from the earlier markets like China, South Korea, even some of the European markets, we're still at the beginning."
All of Coca-Cola's plants in China are operating, but consumption of its products is still lower than the year prior and the company expects a full recovery to take time, Quincey said.
"While we're encouraged by the improving trends in China, we recognize other countries may not follow the same trajectory and changes in social distancing practices may be gradual, and the situation in China could certainly continue to evolve," Quincey said. "It is simply too soon to estimate exactly what may lie ahead."
Shares of Coca-Cola fell 1% in midday trading April 21 at $46.68. Global markets were broadly down following a falloff in crude futures.