Coca-Cola Company shows strength in sales, despite slowing consumer demand
ATLANTA Despite a 3 percent sales decline in the soft drinks category this past quarter, Coca-Cola seems to be strongly resisting the slowing consumer demand. Coca-Cola’s chief executive announced yesterday that he was confident the company would overcome the problems of the changing economy and gain market share.
The beverage-manufacturing conglomerate is showing strength because of its international support, as well as its consistent sales of its semi-recent Coke Zero drink. North American sales, which make up 30 percent of Coke’s total revenues, showed a decline of 2 percent in the volumes of cases sold. However, case sales are up 18 percent in India, 17 percent in China and 7 percent in Brazil and Mexico, helping the company’s overall sales volume to increase by 5 percent.
“There are going to be areas of the world that will be growing less,” said Muhtar Kent, president and chief executive officer of Coca-Cola Company. “But despite the volatility, we are in the best consumer business there is, with tremendous resilience if we take the right actions. And we will take the right actions.”
Data shows more people dining at home to save money
AUSTIN, Minn. With consumers looking to save money by eating dinner at home or grabbing lunch at their desks more frequently, sales of microwavable meals are expected to grow. The downturn in the economy already has had an impact on how frequently consumers are visiting restaurants for dinner.
Experts say more workers are brown-bagging at lunch in an effort to save money. A recent poll by NPD Group found that nearly 12 percent of lunchtime meals were brought from home last year, up from 11.3 percent in 2007 and an all-time high since 2001. Those polled said cost-saving was their primary motivation for packing their lunch.
Packaged meals that can be prepared easily and eaten in their containers are especially appealing to office workers looking to grab a quick, inexpensive lunch. Sales of ramen noodles and microwavable package meals have been on the rise.
Dollar sales of microwavable package dinners jumped more than 22 percent in supermarkets, drug stores and mass outlets (excluding Wal-Mart) for the 52 weeks ended Aug. 10, 2008 according to Information Resources Inc., a Chicago-based market research firm.
IRI data shows Hormel Completes in the lead, with a 36 percent dollar share of the category. Conagra Foods Inc.’s Chef Boyardee microwavable package dinners claims a 26 percent dollar share of the market.
Del Monte recently launched Del Monte Harvest Selections, microwavable meals in six varieties, including beef stew, Italian style pasta bake, chicken cacciatore, home-style chili with beans, spinach and cheese ravioli and Santa-Fe style rice and beans. The meals are packed with a full cup of vegetables per meal, which meets 40 percent of the USDA recommendations for vegetables. Del Monte is positioning the brand as one of the most healthful microwavable options available on store shelves.
Competitors are positioning their brands as healthy choices as well. Hormel recently extended its Hormel Compleats line to include a collection of six healthy SKUs which contain fewer than 320 calories and less than 10 grams of fat. Compleats healthy line, which is branded with green packaging to set it apart from the rest of the line, will hit store shelves in Spring 2009.
Last year, Hormel Foods relaunched its existing Microwave Trays as Hormel Completes, a 20-variety line of microwavable meals, and rebranded it as Hormel Compleats. The brand, which was included on Information Resources 2007-2008 New Product Pacesetters Rising Stars list of projected top 10 food and beverage brands, has tripled in sales in the past three years making it the fastest-growing product in the company’s grocery product division.
General Mills also is beefing up its quick-meal offerings with premium line extensions to its Bowl Appetit! brand and additions to its Hamburger Helper Microwave Singles brand. The company is looking for additional ways to bring innovation to the category.
New World Pasta also joined the microwavable meal arena with its Ronzoni Bistro, microwavable pasta meals in four varieties.
Ramen noodles also are a key segment in the quick-lunch category. IRI data shows dollar sales ahead 8 percent for the 52 weeks ended Aug. 10, 2008 in all three channels, with Maruchan in the lead with double-digit dollar sales increases on its ramen noodles.
The drug channel, which has significant lunch hour foot traffic in many locations, has done very well with these categories. “In the last few years, we’ve seen the number of items on drug store shelves jump from two to six, on average,” said Brett Asay, product manager of Hormel Compleats. “Some retailers are adding significantly more items to their shelves as they see the success of this product.”
The drug channel has been very promotional in the category, often running deals on multiple purchases. CVS recently used an endcap to feature a Simply Asia’s rice noodle soup bowl variety four-pack priced for $3.99 and has run deals on Betty Crocker Bowl Apetit.
Safeway supermarkets are promoting noodle lunches heavily. Nissin Souper Meals Nissin Chow Mein and Chow Pasta products were promoted at four for $5, while Maruchan Yakisoba Japanese-style noodles were priced five for $5. Maruchan six-pack instant noodle lunches were being promoted at two for $6. At 50 cents a bowl, it’s at attention-getter for consumers looking to stretch their dollars in a tight economy.
Spartan names Eidson CEO, moves forward with restructuring plan
GRAND RAPIDS, Mich. Spartan Stores on Wednesday announced the addition of Dennis Eidson to position of president and chief executive officer, pursuant to the succession plan previously announced Aug. 7. Eidson succeeds former chief executive officer Craig Sturken, who will remain as executive chairman.
“I am extremely pleased to announce this important step in our company’s succession plan,” Sturken said. “Dennis is the right individual to lead our organization forward. He has been instrumental in developing, guiding and executing the business strategies that produced record fiscal 2008 profits and 10 consecutive quarters of double-digit operating earnings growth. He was also the chief architect behind our very successful marketing, merchandising and category management strategies that strengthened our market position and sustained our business performance.
“Our long-standing objective has been to achieve profitable growth through a balanced combination of organic growth supplemented by prudent acquisitions,” Eidson said. “Our recently announced acquisition of VG’s Food and Pharmacy is our third significant retail acquisition of an independent operator in less than three years. We have successfully integrated the first two retail acquisitions, improving the sales and efficiency of these operations, and becoming increasingly adept at the integration process and optimizing value from the acquired operations. In addition, we remain the exit strategy of choice for many of our distribution customers’ retail operations. In the near-term, we will concentrate efforts on integrating our latest acquisition and driving organic growth through our capital investment program.”