Coke profit up on more purchases, smaller cans

Despite a continued slump by Diet Coke in North America, Coca-Cola’s biggest business — sodas — ended the year in positive territory.

Volume for soft drinks in North America, the Atlanta company’s biggest market, grew 2 percent in the fourth quarter of 2015, overcoming a 5 percent decline for Diet Coke, Coke reported Tuesday. Volume for the year was flat.

The period had six fewer days than a year ago, and revenue fell 8 percent in the quarter to $10 billion. That still beat analysts’ expectations of $9.91 billion. Quarterly profit rose 61 percent to $1.2 billion.

Coke President James Quincey said the company’s “strategic focus on driving consumption of smaller package sizes” continued to work well. The number of purchase transactions in North America grew 3 percent and outpaced volume growth, he said, “as consumers increasingly reached for mini-cans, smaller PET and 8 ounce glass bottles as well as our premium aluminum bottles.”

The emphasis on smaller cans and bottles is a key part of Coke’s strategy for fending off criticism that its soft drinks contributed to the nation’s obesity epidemic, while also boosting unit revenue and profit.

Meanwhile, Coke’s volume for what it calls “still beverages” — waters and such — grew 6 percent in the fourth quarter and 5 percent for the year.

Coke began 2015 with a $3 billion productivity plan that resulted in reported cuts of about 1,800 employees — about 500 of those jobs in the metro area.

The company on Tuesday also accelerated another goal set in 2015 — refranchising the North American bottling operations it picked up in 2010 by buying most of Coca-Cola Enterprises for more than $12 billion.

Coke CEO Muhtar Kent said he wants to refranchise all operations by the end of 2017. Asked Tuesday by one analyst why the company spent so much on CCE only to turn around and break it up, Kent said the purchase helped Coke put systems in place that made the bottling operations more uniform and efficient.

“Bottler performance is improving,” Kent told analysts. “We have a new structure to last us the next number of decades. And we’re putting our bottlers in the right hands.”