The extent to which the prolonged closure of the out-of-home channel throughout much of last year impacted volumes and revenues at bottler Coca-Cola HBC has been revealed in the company's full-year results.
According to the group, the channel, which accounts for more than 40% of its revenues, 'operated with severe restrictions during periods of lockdown, and below capacity even when operational', the business said.
During the most severe weeks of lockdown, in April 2020, the business saw volume declines of between 70% and 90% in out-of-home, while in the third quarter of the year (a period that saw businesses reopen), this had reduced to 'high single-digit declines'.
As the year drew to a close, with renewed restrictions in place, Coca-Cola HBC said that volumes were down by 'mid-teen' percentages.
Volume Performance
Across the full-year, volumes were down 5.7%, or 4.6% on a like-for-like basis, while net sales revenue fell by 12.7%, to €6.13 billion, with an improvement seen towards the end of the year.
It said that four of its largest markets managed to grow volumes during the year: Russia, Nigeria, Poland and Ukraine.
"The improved second-half trading was driven by a return to growth in the at-home and greater resilience in the out-of-home, despite a resurgence of infections in many of our markets towards the end of the year," commented Zoran Bogdanovic, Coca-Cola HBC chief executive.
"Partnering closely with The Coca-Cola Company team on rigorous prioritisation of our joint market investments, coupled with our rapid adaptation of the route-to-market and excellent execution, resulted in strong value share gains in both non-alcoholic ready-to-drink and sparkling across the majority of our markets."
While out-of-home volumes suffered, Coca-Cola HBC said that its at-home channel 'strengthened' during the year, with volumes hitting a mid-single-digit growth rate in July, that was sustained through the third and fourth quarters.
It noted that some consumers 'switched some of their traditional out-of-home routines for at-home ones', and has sought to capitalise on this with new product formats.
2021 Forecast
Looking ahead, Coca-Cola HBC said that it expects to see a 'strong FX-neutral recovery' in 2021, driven by gradual volume recovery and a stronger price/mix.
"While the economic outlook remains uncertain, we are clear on the opportunity and direction for our business and are investing to strengthen our capabilities which will drive our long-term performance, underpinned by further advances on sustainability," said Bogdanovic.
"Looking to 2021, we will continue adapting fast in a dynamic market and partnering with our customers to drive a strong recovery in FX-neutral revenues, along with a small increase in EBIT margin."
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
