Coca-Cola Falls Into Revenue Problem, To Struggle In 2020 Second Half

2020 has been a frustrating year for Coca-Cola, as the soft drink company has been struggling with sales. Coca-Cola is going through a period that might result as one of its worse in the history of the company as its sources of revenue remain shutdown in Nigeria and globally.

With hospitality business still on lockdown, Coca-Cola's revenue has been declining. Closure of restaurant, theaters, cinemas, bars, sport venues, and several more have dipped into the sales of Coca-Cola, resulting to the revenue of the giant soft drink firm to dwindle.

Why Is Coca-Cola Struggling?

The company reported that its adjusted quarterly revenue dropped 28%, reflecting the extent of the damage COVID-19 pandemic and agressive measures like lockdown have on Coca-Cola and the drink industry. In Nigeria, the lockdown was on for about two months, and despite the easing of the lockdown in Nigeria, some hospitality business remain close, while the ones opened are conducting skeleton operations and consumers are still cautious of visiting these outlets.

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While in other countries, the lockdown is still in effect, so Coca-Cola's markets are under attack from the COVID-19 pandemic. Despite its products, Fanta, Sprite being one of the low priced soft drink in these markets, consumers' purchasing power is also affecting Coca-Cola, as consumers' priorities have changed in response to the pandemic and resulting economic downturn.

But the revenue problem of Coca-Cola will not end with the first half of 2020, as the company is bracing up for more revenue challenging period in the second half of this year as lack of vaccine for coronavirus continues to restict movement, keep consumers at home, affect jobs and reduce household income, “We believe the second quarter will prove to be the most challenging of the year; however, we still have work to do,” Chief Executive Officer James Quincey said in a statement.

Brewery Companies Are Also Struggling

Two months after AllNews projected more troubles for Guinness Nigeria, Nigerian Breweries and International Breweries in 2020, Guinness Nigeria becomes the first alcoholic company to admit that its earnings will be disappointing this year, so shareholders have to brace up as production and revenue continue to tank.

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Guinness Nigeria made this known to prepare its shareholders ahead as its business has continued to struggle to survive the pummeling of the pandemic and measures adopted to curb the spread. Guinness Nigeria said its on-trade segment was negatively impacted by the COVID-19 lockdown. This is believed to have led to a loss for the company that also struggled last year.

"Due to a combination of the impact of COVID-19 and the asset impairment, we expect the profitability of the Company for the Financial Year to 30th June 2020 to be impacted..." Guinness said in a statement. Meanwhile, in May this year, AllNews in a report titled "Nigerian Breweries, Guinness, International Breweries Move From Frying Pan To Fire In Q1 2020" had projected that alcoholic companies would experience more trouble this year than what was experienced last year. The companies had just escaped the pummeling of Buharinomics (President Buhari's policies) before the COVID-19 pandemic struck.