Coca-Cola Amatil Ltd [ASX:CCL] has revealed at their AGM why the company is expecting a flat 2017. Sweet is no longer a big ticket item, as sales of sugar-filled soft drinks continue to fall.
David Gonski, the departing chairman as of Tuesday, affirmed the company’s position in his final speech. He did not mention the flagship brand once. His focus — providing ‘the right drink for every occasion.’
Diversification seems to be the name of the game. You only have to look at the launches of new and spin-off products. While Coke Life failed to boost sales, Barista Bros iced coffee proved to be a hit locally. This validates the company’s constant push for new products. An ongoing price for bottled water is also primarily to blame for a poor outlook. Numerous analysts highlight Mount Franklin’s higher cost as a big drawback.
What does this mean for Coca-Cola Amatil Ltd shareholders?
Investors looking to get out can take advantage of a share buyback program. There are still $268 million worth of shares available under the scheme.
While the news hasn’t impacted the share price yet, investors will clearly be looking for stronger signs of growth in the future. The household brand can tide small dips, but they won’t want to make a habit of it.
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