Coca-Cola CEO: Global Volumes 'Fell Off A Cliff'

Coca-Cola Co KO saw its global volumes fall 25% since the start of April which marks a complete reversal from prior trends, CNBC's Sara Eisen reported Tuesday.

Coca-Cola reported first-quarter earnings of 51 cents per share, which beat consensus estimate by 7 cents. Revenue of $8.6 billion beat the $8.28 billion estimate.

What Happened

Coca-Cola's global volumes were higher by 3% through February (excluding China) but then "fell off a cliff," Eisen said after chatting with CEO James Quincey. The CEO said at least half of its beverage business is sold to channels away from home and growth in the at-home category isn't large enough to offset losses elsewhere in the business.

Ironically, some categories that were experiencing secular declines prior to the coronavirus outbreak are now rebounding, she said. One example is more consumers eating breakfast at home, which supports a jump in demand for Coca-Cola's Simply Orange Juice.

Why It's Important

Coca-Cola saw "absurdly strong" levels of growth as consumers stockpiled their cupboards with beverages but tapered off in the past few weeks. Quincey attributed the loss of momentum to consumers coming to realize the economic outlook is not so great, Eisen said.

"They are already seeing that sort-of recession mindset impact spending -- people in the U.S. especially," she said.

Quincey told Eisen the company's decision to scrap its 2020 outlook is due to multiple unknowns ahead. But when the global economy starts to recover, Coca-Cola should see its beverage business grow.

Coca-Cola's stock traded lower by 2.77% to $45.24 at time of publication.

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