(Reuters) – Coca-Cola Europacific Partners, a bottling unit of Coca-Cola, lowered its annual sales forecast on Tuesday in response to reduced demand for beverages in Europe, as well as weakness in Indonesia linked to the Middle East conflict.
Although demand for sodas has remained resilient, customers from lower income groups are becoming more cautious and opting to eat at home rather than dining out, hurting volumes of Coca-Cola Europacific Partners.
The company bottles Coca-Cola, Fanta, Sprite and Monster in Western Europe, Australia and New Zealand and sells drinks to fast-food chains including McDonald’s and KFC-owner Yum Brands, as part of combo meals.
In Europe, however, volumes declined 1.4% in the third quarter, compared to a 4% fall in the previous quarter. The smaller drop was a result of a boost from consumers spending at music festivals and sporting events such as the Euro 2024 Football Championship and the Paris Olympics.
Volumes in Southeast Asia were impacted by weakness in Indonesia, a Muslim-majority country, mainly arising from a boycott of multinational brands in response to the crisis in the Middle East.
The company’s adjusted revenue rose 2.4% to 5.36 billion euros ($5.84 billion) in the third quarter. Overall comparable volumes rose 19.1%, while revenue per unit case was 5.32 euros.
Coca-Cola Europacific Partners expects its annual comparable revenue to rise about 3.5%, compared with a prior forecast of about 4% growth.
In October, Coca-Cola forecast its annual sales to grow 10% as growing demand for its higher-priced sodas and juices in the U.S. helped it post a surprise rise in third-quarter sales.
($1 = 0.9181 euros)
(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Pooja Desai)
