Coca-Cola spurs 42% revenue growth after returning to pre-pandemic marketing spend

Dive Brief:

The Coca-Cola Company reported net revenues grew 42% to $10.1 billion in Q2 2021, per an earnings report. The company partially attributed the growth to the ongoing recovery in markets where the pandemic is abating.
The company doubled its marketing spend year-over-year in the quarter, CFO John Murphy said on an earnings call. Coca-Cola's three priorities for marketing investment are increasing consumer-facing marketing spend toward 2019 levels, improving quality of spend and allocating spend in a more targeted manner, Murphy explained.
Coca-Cola's doubling of marketing spend from Q2 2020 sees the beverage giant returning to pre-pandemic levels, but with a focus on innovation, effectiveness and efficiency as it looks to navigate an "asynchronous recovery," per the earnings report.

Dive Insight:

In an attempt to emerge from the pandemic stronger than before, Coca-Cola doubled its year-over-year marketing spend in Q2 2021, with favorable results. Not only did the company rebound from last year's pandemic-battered quarter, but it saw revenues and earnings surpass Q2 2019. Executives attributed the focus on marketing innovation, effectiveness and efficiency to helping deliver this growth.

The latest quarterly earnings report is the culmination of strategic marketing moves the company has made since the height of the pandemic. Last summer, executives said the company would focus on its major brands while eliminating "zombie brands" worldwide. The company's latest earnings report called out the launch of Coca-Cola Zero Sugar, which was supported by a 360-degree marketing activation plan and simplified, back-to-basics branding and grew 15% year-to-date.

CFO Murphy in February said the company would focus on targeted experiential campaigns, a model that led to Sprite's first-ever global campaign, called "Let's be Clear." That campaign led to improved share gains, while the "I Want The Fanta Mystery Flavor" campaign in Europe drove accelerated growth and improved share.

Along with improved performance in away-from-home channels that have seen a boost as consumers return to pre-pandemic activities, Coca-Cola has also performed well with direct-to-consumer (DTC) e-commerce. In its most recent earnings report, Coca-Cola claims it remains the e-commerce retail leader in the non-alcoholic ready-to-drink category, growing retail value 54% year-to-date. It is also seeing growth in Europe and has boosted consumer awareness in Japan, where it uses the DTC Coke On app. DTC e-commerce accelerated during the pandemic and is expected to remain a priority, especially for CPG brands.

During the quarter, the company's flagship brand included poetry on its summer packaging for the first time, keying into themes about a return to normal summer activities after more than a year of the pandemic. The "Open For Summer" designs were part of a "Summer Tastes Better" campaign that ran across TV and radio, whereas rival Pepsi took a bigger swing with its reopening-themed campaign.

Along with its overall marketing spend increase, the company in North America plans to nearly double its spending on minority-owned media companies by 2024, with businesses led by Black, Hispanic and Asian-American and Pacific Islander (AAPI) people accounting for 8% of its total annual media budget over the next three years. The investment came as other brands and agencies looked to meet consumer demands spurred by last summer's protests for racial justice.