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Using the Soft Drinks Price Tracker to Explore Pricing Dynamics: Spotlight on Coca-Cola in Brazil

8/5/2022
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Last month, Euromonitor International launched its latest dashboard: the Soft Drinks Price Tracker. With unit price inflation still top of mind for suppliers and retailers across the global beverages industry, the Price Tracker dashboard allows subscribers to monitor product price movements, and assortment and pack size pricing strategies across categories and brands in the online channel. This data can be used to:

  • Compare the relative shift in prices over time across categories and markets
  • See which brands are driving the price movement in a category
  • Drill into each brand to observe price changes across available pack types, identifying how brand owners are adapting their pack mix.

The Price Tracker utilises SKU-based data from Via, Euromonitor’s pricing and product attribute database. Daily price, mix and availability data is extracted from more than 2,000 online retailers.

Case study: Understanding Coca-Cola pricing action in Brazil

For instance, the Price Tracker can be used to examine in more detail how inflation is impacting the world’s largest soft drinks company, Coca-Cola, in one of its most important long-term markets – Brazil.

Coca-Cola FEMSA is the largest independent bottler of Coca-Cola products in the world, and the largest of several local bottling partners in Brazil. Within FEMSA’s South America operating division (of which Brazil is the largest single market), FEMSA reported a 25.9% increase in the average price per unit case for the first six months of 2022. This metric represents the revenue realised by the company from the sale of packaged beverages and beverage concentrates to retail customers in the regional operating unit.

But what does this mean for consumers and retail selling price? By utilising a representative sample of online SKUs from the Soft Drinks Price Tracker, we can determine that a substantial increase in the wholesale price per case from FEMSA indeed corresponds to comparable increases in SKU price through the online channel, with significant increases observed in 2022 YTD for two major Coca-Cola carbonates brands.

Through January 2021 – June 2022, we estimate that the unit price per litre for the Coca-Cola carbonates brand increased by 24.0% across a representative basket of online SKUs, first spiking in June 2021, before rising again in the first six months of the calendar year. A similar pattern was observed for the company’s number two brand in the Brazilian carbonates category, Fanta, with a 20.6% price increase between January 2021 and June 2022.

Balancing price increases within the smaller “immediate consumption” packaging type was a key component of the company’s pricing strategy in Brazil over the past year. For example, the 1x220ml pack type for Fanta increased the price per 100ml by 23% over the January 2021 – June 2022 timeframe, while the same pack type for Coca-Cola increased by 22% – among the largest price increases observed for the brand within the Price Tracker’s sample.

Example: Observed Price increases of 220ml SKU, Jan 2022-July 2022, Across Three Leading Retailers in Brazil
Observed Price increases of 220ml SKU.png
Source: Euromonitor International Via Pricing Module

Raising prices but maintaining affordability through the package mix

The 220ml “mini can” package type, first introduced to Brazil in 2017, has proven to be an important vehicle for boosting profitability and promoting portion control options with consumers in many Coca-Cola markets, including North America and Western Europe. A wide array of pack types and sizes allows the company flexibility in revenue growth management for leading brands: responding to rising input costs by increasing prices per SKU where appropriate, while preserving affordability per transaction by adjusting the mix to focus on smaller-sized options.

Further examination of the company’s single-serving transaction packaging options for Coca-Cola illustrates how a combination of evolving size mix and price strategy is reflected in leading online retailers.

Soft Drinks Price Tracker: Coca-Cola Immediate Consumption (Single) Pack Types, 1x200-600ml Pricing

Soft Drinks Price Tracking.png

Source: Euromonitor International Soft Drinks Price Tracker

310ml slim can emerges as a popular innovation format for the Coca-Cola brand

While all pack sizes in the single-serving segment increased in price from January of last year, the largest price increases occurred in the 220ml “mini-can” pack type (+21.8% since January 2021) and the newer 310ml slim can (+21.0% since January 2021). In particular, the sleek 310ml can – now preferred in many markets for new flavours and product development – increased from just 5.9% of the single impulse mix in the online sample to over 15% by June 2022, underscoring the importance of the pack type to Coca-Cola’s strategy in the Brazilian market.

Brazil Soft Drinks Price Tracking.pngSource: Euromonitor International Soft Drinks Price Tracker

Most recently, a new 310ml launch was brought to the Brazilian market in July 2022, the latest limited edition launch from the Coca-Cola Creations marketing initiative: DJ Marshmello’s Limited Edition (a strawberry and watermelon flavour).

Coca-Cola Brazil Marshmallow.jpg

Source: Coca-Cola Brasil Instagram

For more Euromonitor analysis on Inflation, click here, or for more information on the Soft Drinks Price Tracker,  please contact your local account representative.

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