Outgoing Coca-Cola chairman Muhtar Kent thinks that we need to change how we talk about soda sales.
Soda consumption has been declining for 13 consecutive years, according to an annual report from industry newsletter Beverage Digest. However, talking about consumption alone does not tell the full story.
“The whole concept of declining soda sales — I think it’s wrong to think that as a phrase itself and to keep it ingrained in our heads,” Kent told CNBC’s Sara Eisen in an interview that will air Friday on “Closing Bell.”
Coke depended on increasing the volume of its packaging too much from the late 1980s to the early 2000s, Kent said. Consumers began turning away from soda in favor of options that they perceived as healthier. The beverage company began shrinking the size of its cans and bottles without dropping the price proportionally, a move that strengthened its sales.
“I think that the U.S. consumer, from a transactions point of view, is increasing its transactions of sparkling drinks,” he said.
Sparkling drinks includes Coke’s expansion into sparkling water, appealing to consumers who want a healthier drink but still crave carbonation. Its water brands Dasani and Smartwater have released their own lines of sparkling water.
Coke announced Thursday that Kent would retire next year, with current CEO James Quincey — who also succeeded him as CEO in 2017 — assuming the role. His retirement ends a career with the beverage company that began in 1978.
“Forty years ago at Coke, we hardly knew what a fruit tree looked like,” he said.
Now the company is the largest supplier of juice around the world, another indication of how changing consumer tastes have motivated Coke to branch out beyond the one product that drove business for a century.
The Atlanta-based company now sells almost 4,000 products. It owns more than 20 brands that see annual sales of at least $1 billion, up from 12 a decade ago.
Coke has a market value of $209.8 billion, and its stock is up nearly 7 percent this year.
The entire interview will air on CNBC’s “Closing Bell,” beginning at 4 p.m. ET.
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