Coca Cola Amatil shareholders have heard the company’s new Coke Life product has been well received though price wars are hurting profitability.
Fairfax reports CEO Alison Watkins said the environment made increasing prices difficult.
"We're in a low-inflation, almost deflationary, environment – we're benefiting from lower commodity prices as well but rate [price] realisation is definitely the challenge in Australia at the moment," Watkins said.
News Corp reports that the new Coke Life beverage – CCA’s first new product since Coke Zero in 2006 – had been popular so far.
It had already converted 13 per cent of the sugar cola market, AAP reports, and Watkins hopes in the long-term that it would represent one or two per cent of CCA's Coke brand volumes.
Life, sweetened with a mix of stevia and cane sugar, had already become the second-most popular pack for Coke in the 1.25 L and 250 mL sizes since its April 7 launch.
Watkins said the real test would be in the next two months or so as repeat purchase patterns were seen.
The release of new products – such as Life, coconut water, and Barista Bros milk drinks – increased efforts with marketing and a three-year cost-cutting program are hoped to see the company’s profits increase again.
Net profit last year declined 25 per cent.
The savings program involves taking $100 million out of the cost base in the next three years.
Image: http://www.coca-colacompany.com