Coca-Cola to Launch Slim Cans ??? FT - Analyst Blog

5 Best Financial Stocks To Watch Right Now

The Financial Times recently reported that cola giant The Coca-Cola Company (KO) will launch smaller and slimmer versions of its Coke, Diet Coke and Coke Zero brands of soft drink cans in U.K. later this month.

Coca-Cola will launch a 250 ml can, which will contain 105 calories as compared to 139 calories in the larger 330 ml can. The slimmer cans are expected to be priced at the same rate per 100 ml as its larger counterpart.

Beverage giants are witnessing a decline in the sales of carbonated soft drinks (CSD), especially the colas, due to rising health consciousness and increasing public and governmental concerns regarding obesity and other co-morbidities.

To reinvigorate the sales of its sparkling beverages, like Coke and Fanta, The Coca-Cola Company is offering more choices to its customers in package sizes, sweeteners and beverages (including more low- and no-calorie selections). The new slim cans are part of this ongoing plan.

Other beverage companies are also gearing up to cater to the emerging trend. PepsiCo, Inc.'s (PEP) low-calorie cola, Pepsi Next, which contains 60% less sugar, achieved nearly $100 million in retail sales in less than 12 months in the market. PepsiCo is now making evolutionary natural sweeteners and flavorings aimed at reducing calories to re-vitalize declining sales of its colas. The food and beverage giant also aims to grow its nutrition brands like Quaker, Tropicana and Gatorade.

Following the success of Dr Pepper TEN (the low-calorie version of its Dr Pepper brand of soft drinks), Dr Pepper Snapple Group Inc. (DPS) plans to expand its TEN platform to revive its CSD sales. Accordingly, the company launched TEN versions of 7UP, Sunkist Orange Soda, A&W Root Beer, Canada Dry Ginger Ale and RC Cola brands in the U.S. in early 2013.

Coca-Cola's bottler Coca-Cola Enterprises Inc. ! (CCE) is also slowly shifting its product mix from colas to energy drinks and other non-carbonated beverages to benefit from this emerging health and wellness trend.

Moreover, with consumers becoming more and more aware of the pitfalls of obesity and its popular connection made with CSDs, the beverage makers are donning the role of the new health pundits. In their more-responsible avatars, the cola giants are not only providing transparency in labeling, but are also promoting fitness and nutrition education programs. Coca-Cola also avoids marketing these sugary drinks to children under 12.

Coca-Cola carries a Zacks Rank #4 (Sell).