00:00You know, we're talking about a mature consumer products company.
00:02We're not talking about tech stock here now, Paul.
00:04So, you know, 7% sales growth beat the 5% estimates, you know, comparable EPS up 11.
00:11These are good numbers.
00:13You know, consensus was a little bit below that, and a lot of it's because consumer sentiment in a lot
00:18of big markets, including the U.S., continued to be subdued.
00:21And so there was some hesitation going in, although we kind of knew World Cup was going to give them
00:27a lift, and it did, a really nice lift.
00:29So it was a high-quality performance.
00:31It was very much volume-driven, wasn't so dependent on price as it had been in the past few quarters,
00:37and balance sheet got stronger.
00:40It was just hard to find any fault in this quarter.
00:44I'm curious about the portfolio of drinks that Coca-Cola now has because it's not just Coca-Cola or the
00:50slim version of it that Paul likes so much,
00:52but there's also sugar-free soda, sports drinks, water, because this younger generation seems to, you know, not like the
01:00sugary soft drinks as much as others in the past.
01:04What is the fastest-growing part of that beverage portfolio, Ken?
01:09That's a good question, Scarlett.
01:11You know, Coke would say to that, you know, part of the benefits of the FIFA World Cup sponsorship is
01:16that it gets them close to the consumer,
01:18and it hears about trends, you know, in real time, gives them the pulse of what's going on in the
01:23market.
01:23And so what they said today is look in the second half for Coke Zero-Zero to get a higher
01:30level of promotion.
01:32What is that?
01:33Well, their very successful Coke Zero, reformulated, is going to have a no-caffeine version.
01:38That's not exactly novel to the soft drink industry, but it's been probably under-marketed, under-promoted for people like
01:44me.
01:44I can't drink caffeine in the afternoon or I can't sleep.
01:47This is going to be kind of front and center for them in the second half.
01:50But to your point, Scarlett, functionality, getting more from your beverage than just hydration is still very key, you know,
01:58in terms of consumer demand.
01:59They want more protein.
02:01Fairlife is a leader, and it was up 18% sales in the quarter.
02:05It's really strong numbers.
02:07Advanced hydration, that's Powerade.
02:09That's getting more marketing muscle now in the second half, so look out for more of that.
02:14And I'm sure the company has more innovation up its sleeve, didn't want to share today.
02:17But at least those three products, we can look for a higher-level promotion in the second half.
02:23So, Ken, do investors and analysts, do they even look at market share anymore, Coke versus Pepsi, or is that
02:30just a thing of the past?
02:31Oh, they certainly do.
02:32And we get here at Bloomberg Intelligence by virtue of Circona.
02:36Now, you've got to remember, well, Circona, it's really predominantly a U.S. tracking.
02:40And Pepsi would argue, you know, we're more than just soft drinks.
02:43PepsiCo, I think, has probably a wider portfolio of different categories than Coca-Cola does.
02:50Coke's still 75% sparkling, 75% brand Coca-Cola.
02:54And so, but they're branching out, you know, beyond that.
02:59But Pepsi would say, hey, be fair, we're more than just cola.
03:02But Coke is gaining share in virtually all of its categories.
03:07Ken, we mentioned how the World Cup was definitely played a role here.
03:11But how does a company like Coca-Cola build on that momentum generated by the World Cup, which is, you
03:17know, a one-time event as far as, you know, earnings impact is concerned?
03:21It is a one-time event.
03:22But Coke went out of its way to say this morning, look, you know, the consumer engagement that we got
03:29from the World Cup, you know, they had a lot of activities beyond that.
03:32Innovative packaging.
03:34They had games and events outside the stadium going on.
03:38They had digital interactivity.
03:42They had a lot going on that they feel that there's going to be, you know, benefits resonating beyond just
03:49the immediate.
03:51So we'll look for that.
03:53But like I said, you know, Coke's engaged with its consumers, and I think that pays dividends.
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