Coca-Cola builds on early lessons from pandemic to prepare for Delta variant success

July 21 (Reuters) – Coca-Cola Co (KO.N) will build on its tested pandemic strategy of focusing on big brands and doubling its supply chain to combat a potential impact of the Delta variant of the coronavirus, its finance chief said on Wednesday.

The comments from CFO John Murphy come as the reopening of global economies helped the beverage giant beat second-quarter expectations and raise its full-year sales forecast, pushing shares in the Dow component up to ‘at 3%.

Australia’s spike in infections in the United States brought back lockdowns and other restrictions in some areas, raising fears of the pace of the economic recovery and rocking stock markets earlier this week.

Sales in some Asian markets were hit in the second quarter by the resurgence, Murphy said, adding that a likely impact of the variant had been built into the forecast for increased sales.

“When the going gets tough, the big brands are the ones you focus on,” Murphy told Reuters.

Coca-Cola has streamlined its product line over the past year to mitigate the fallout from the pandemic. The company, which owns brands such as Sprite, Fanta and Dasani, has abandoned its TaB and Coca-Cola Energy diet soda brands in the United States and sold its brand of coconut water ZICO.

The company is particularly vulnerable to theaters, restaurants and stadiums shutdowns, unlike rival PepsiCo (PEP.O) which relies more on food and retail channels.

“If we have a new site closure or capacity restrictions, Coca-Cola’s sales are going to suffer. For this reason, we see it as the riskiest name for Pepsi,” said Garrett Nelson, senior analyst of Coca-Cola. actions at CFRA Research.

Coca-Cola’s adjusted overall revenue rose 41.1% in the second quarter to $ 10.13 billion, beating estimates of $ 9.32 billion, according to IBES data from Refinitv.

The company raised its annual organic revenue target to an increase of 12% to 14%, from the high single-digit increase expected earlier. Adjusted annual earnings per share is expected to increase 13% to 15%.

Adjusted earnings of 68 cents per share beat expectations of 56 cents.

Uday Sampath report in Bangalore; Editing by Sriraj Kalluvila

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