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Coca-Cola Q4 sales volumes drop on global COVID-19 shutdowns

February 11/2021

MOSCOW (MRC) -- Coca-Cola expects its sales volume to rebound in 2021 as COVID-19 vaccinations grow, following fourth-quarter 2020 drops in all regions except Latin America, reported S&P Global with reference to executives' statement on Feb. 10.

"There is no doubt the near-term trajectory of our recovery will still be impacted by the presence of the virus in most markets," CEO James Quincey said during the company's Q4 2020 earnings call.

Coca-Cola, a top buyer of virgin and recycled polyethylene terephthalate (PET), a resin used to make plastic bottles, saw volumes decline when the coronavirus pandemic hit in 2020, prompting shutdowns of major gatherings where bottled drinks sell heavily, such as sports events, concerts.

The company's quarterly volumes in China showed gains, while Japan showed soft traffic in vending machine sales and India showed signs of recovery in sales outside of homes, Quincey said.

Europe, Middle East and Africa regions showed resilience despite varied levels of lockdowns in Q4, and North America's away-from-home volumes saw impacts in multiple states with restrictions on indoor dining and at bars, Quincey said.

The company's net revenues fell 5% in the quarter to USD8.6 billion. The company reported Q4 net income of USD1.456 billion, down 28.7% from USD2 billion in the year-ago period. For the year, Coca-Cola reported profits of USD7.747 billion, down 13% from USD8.92 billion in 2019.

CFO John Murphy said the company expects to be dealing with COVID-19 for the better part of 2021, with the first half more challenging than the second.

He said sales volumes so far in 2021 were down to mid-single digits, and "to the degree the top line is driven by away-from-home recovery, we'd expect the channel and package pressures experienced last year to abate."

US virgin PET prices were last assessed Feb. 3 at USD1,069/mt DDP US West Coast, a 12-month high in formula-based pricing stemming from upstream feedstock costs, S&P Global Platts data showed. Recycled PET clear flakes were last assessed Feb. 9 at 45 cents/lb (USD992.08/mt) FOB Los Angeles, Platts data showed.

Coca-Cola on Feb. 9 announced the launch of its first-ever 13.2oz bottle in the US made from 100% recycled PET. The company will start distributing Coke products in those bottles in February in the US Northeast, Florida and California. Larger 20oz rPET Coke bottles also will be available in February in California and New York, followed by Texas in spring 2021.

As MRC informed earlier, Coca-Cola will not ditch single-use plastic bottles because consumers still want them, the firm's head of sustainability told the BBC in late January, 2020. Customers like them because they reseal and are lightweight, said Bea Perez. The firm, which is one of the biggest producers of plastic waste, has pledged to recycle as many plastic bottles as it uses by 2030.

According to MRC's ScanPlast report, Russia's overall PET consumption totalled 71,830 tonnes in December 2020, up by 8% year on year. In 2020, PET consumption in all sectors (injection moulding, fibers/filaments, films) exceeded the level of 2019 by 17% and amounted to 717,310 tonnes.
Author:Margaret Volkova
Tags:Near East, Europe, North America, South America, PET-granulate, injection moulding, fibers/filaments, medicine, recikling, packaging, film, PET bottles, Coca-Cola, China, Russia, USA.
Category:General News
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