Dasani Sales Plunge in North America

By William Neuman, New York Times, October 20, 2009

“Mr. Kent said that sales of Dasani brand water in North America were down by more than 19 percent. Sales of multipacks of Dasani, a popular packaging for water, were down even more, he said.”

Coca-Cola said Tuesday its third-quarter profit rose only slightly from the comparable period last year as sales rose strongly in emerging markets like India and China but continued to slump in North America and Europe.

The company has been spending heavily to try to turn around North American sales, through advertising, new marketing techniques and changes in packaging and store displays. Despite that, North American sales, measured by case volume, were down 4 percent in the quarter, which ended Oct. 2, compared with the same period a year earlier.

That was partly because the Fourth of July holiday shifted from the company’s third quarter to its second quarter this year. Volume sales for the first nine months of the year were down 2 percent.

Outside of North America, case volume sales grew 4 percent in the quarter.

Net income for the company was $1.896 billion for the quarter, up from $1.89 billion a year earlier, which amounted to earnings of 81 cents a share during both periods.

“We’ve been able to deliver for the first nine months of a very challenging operating environment,” Coca-Cola’s chief executive, Muhtar Kent, said in an interview.

Mr. Kent stressed that about 80 percent of the company’s sales volume comes from outside North America.

But he added that he would be “disappointed” if North American results did not begin to improve.

In India, the company reported growth of 37 percent in volume sales. In China, sales grew by 15 percent. Volume sales in Mexico grew by 9 percent while they rose 3 percent in Brazil. In Russia, volume sales dropped by double digits, although the company did not give a specific figure.

John Sicher, the publisher of Beverage Digest, a trade publication, said that Coke, like its rival PepsiCo, was suffering in part because its two biggest product categories in North America, carbonated soft drinks and bottled water, were both declining in sales.

“North America continues to be a problem, and the big challenge in the next year or two is to get North America at least back to flat,” Mr. Sicher said. “North America being flat, with Coke’s international growth, paints a whole different picture.”

Mr. Kent said that sales of Dasani brand water in North America were down by more than 19 percent. Sales of multipacks of Dasani, a popular packaging for water, were down even more, he said.

Stock in Coca-Cola, which is based in Atlanta, fell 76 cents, to $54.03 a share.