The Coca-Cola Company today reported 3% global volume growth – its highest in five years – and 5% organic revenue growth year-to-date, thanks to a market-by-market focus on consumer-driven innovation in both its core sparkling soft drink business and new beverage categories.

“We’ve had a strong first half of the year,” President CEO James Quincey said during a call with analysts. “Our performance reflects the ongoing cultural shifts in our business … we’re embracing change, focusing on growth with discipline and we’re becoming increasingly entrepreneurial in spirit.”

The company’s approach to driving disciplined, sustainable growth is grounded in a keen understanding of the local consumer to build the right portfolio in each market through innovations, acquisitions and “lifting, shifting and scaling” successful brands from market to market. 

Brands like Fuze Tea, Honest Coffee and AdeS/AdeZ plant-based drinks are off to a solid start in Europe, Quincey noted.

“But disciplined growth also requires that our existing brands retain and sharpen their edge by connecting better with consumers’ needs,” Quincey said.

For example, Georgia Coffee in Japan recently launched a new variant called Craftsman, with recipes, flavors and premium packaging designed to appeal to previously under-tapped consumers, including young adults and women. Craftsman helped Coke’s coffee portfolio in Japan reverse recent trends and grow volume mid-single-digits in the second quarter.

This tailored approach to consumption occasions and channels is one way Coca-Colais attracting new drinkers through strategic innovation, Quincey said. Coca-ColaPlus Coffee launched as a trial in Australia and is now rolling out in other markets, with local twists. For example, in Vietnam, the drink was formulated with bold coffee cues to market as an alternative pick-me-up for traditional coffee drinkers in select sales channels, like coffee shops and at-work cafes. Initial results have delivered incremental growth.

These efforts are part of the company’s broader strategy to reinvigorate the sparkling category, which fueled 2% global volume growth in the quarter.

“It’s about leveraging brand edge and innovation to build consumption rituals by offering people what they want, when and where they want it,” Quincey said. 

Retail value of Coca-Cola North America’s no-sugar sparkling soft drink portfolio was up 7% in the U.S., as the newly restaged Diet Coke and Coke Zero Sugar continue to post solid growth. Powerade Zero, Dasani Sparkling and the ready-to-drink coffee portfolio posted double-digit volume growth in the quarter. 

Eliminating ‘Zombies’ and Focusing on Work That Matters Most

The company is aggressively retiring “zombie” brands and shifting focus to high-return opportunities. In 2018, Coke’s Middle East and North Africa business unit identified more than 125 underperforming products for elimination. To date, 60% of these drinks have been discontinued, and the rest will be delisted by end of year.

“Given the benefits we’re seeing, we are now embedding the elimination of zombie SKUs and brands into existing routines, instilling this discipline deeper into all of our business units,” Quincey said.

By focusing only on “work that matters the most,” Coca-Cola is funding reinvestment and driving cash flow. “Because ultimately, it is not about growth for the sake of growing,” Quincey said. “Growth must translate into solid returns for our investors.”

See a full-page infographic on The Coca-Cola Company's second quarter 2018 earnings.