What: In what is being described as Coca-Cola Amatil Ltd's (ASX: CCL) "biggest launch since 2006" (when Coke Zero was introduced), the beverage manufacturer has introduced a new 250 millilitre can to the Australian market.
So What: Okay, so it's not as though it's a new flavour that will blow the world away. It's the same great product, but it could help to fix the company's recent woes.
Although Coca-Cola Amatil still controls the majority of Australia's carbonated soft drinks market (with roughly 60%), its sales volumes and overall earnings have been declining substantially as a result of its prices being roughly 50% more expensive than those offered by its rival Schweppes. As such, the new product size will allow consumers to continue enjoying the world-famous product at a more appealing price.
In addition, it will also appeal to consumers who are watching their waistlines. Changing consumer health trends have been one of the biggest concerns for long-term investors in that more individuals are turning to healthier alternatives to soft drinks. The smaller size will offer a way to enjoy the product whilst reducing sugar and calorie intake.
It should also be noted that the new can size will be much more profitable for the business on a per-litre basis. The new small cans will cost roughly $8 per litre which compares to the normal 375 millilitre cans and 2 litre bottles which cost around $5.90 and $2.20 per litre, respectively.
Now What: Of course, investors will need to remain mindful that the new can size could cannibalise sales of Coca-Cola Amatil's various other packaging sizes, however, I believe it is an excellent way to reinvigorate the brand in Australia. The company will launch a "Perfectly Small Can" campaign over the next few months, highlighting that it is complying with its stated strategy of spending more on marketing.
An even better bet than Coca-Cola Amatil
Although the near-term outlook remains cloudy, I am extremely confident in Coca-Cola Amatil's future and think now is an excellent time to stock up on their shares.
