By Jennifer Maloney 

Coca-Cola Co. is expanding its namesake brand, pushing forward with overseas rollouts of a coffee-infused variant and an energy-drink version of Coke.

After testing Coca-Cola Plus Coffee last year in Asia, the soda giant now plans to launch it in 25 markets by the end of this year, Chief Executive James Quincey said on a call with analysts. Meanwhile, he said, the company will forge ahead in Europe with Coca-Cola Energy, despite objections from its partner Monster Beverage Corp.

As Coca-Cola diversifies beyond soda into water, coffee, juice and other drinks, it is also looking to offer new variants of its flagship brand, Mr. Quincey said. Coca-Cola Zero Sugar, a reformulated diet version, grew by double digits in the latest quarter. And in the U.S., where price increases and a late Easter holiday contributed to a 1% drop in case unit volume, the company said the launch in February of Orange Vanilla Coke, its first new flavor in a decade, helped drive 6% retail sales growth for the Coca-Cola brand.

Rival PepsiCo Inc. also is experimenting with new versions of its namesake brand. The company in June will launch three new Pepsi flavors in the U.S. made with real juice: berry, lime and mango. At the same time, the snacks-and-soda giant is revamping package designs for two existing flavors, Pepsi Wild Cherry and Pepsi Vanilla.

Mr. Quincey said the coffee version of Coke is designed to appeal to people who need a mid-afternoon pick-me-up at work. Coca-Cola Energy offers a stronger caffeine boost than regular Coke and has a new taste, he said.

Coca-Cola owns an 18.5% stake in Monster, the leading energy drink in the U.S., and distributes the brand through its bottling network. Monster has said the launch of Coca-Cola Energy is a violation of an agreement the companies struck in 2015. The complaint is now in arbitration.

Brands such as Monster and Red Bull have propelled energy drinks in North America and Europe. But the category is still nascent in emerging markets, presenting an opportunity to introduce a drink that blurs the boundary between an energy drink and a cola, Mr. Quincey said. "We think it will help complement the other brands that sell successfully in this category," he said.

Coca-Cola Co. said sales grew in the latest quarter, helped by bottlers in the U.K. and Europe stocking up on concentrate ahead of a potentially disruptive Brexit. Organic revenue, which excludes currency swings, acquisitions and divestitures, increased 6% in the first quarter from a year earlier. Unit case volume grew 2%, helped by 6% growth in bottled water, enhanced water and sports drinks.

The deadline for the U.K.'s planned exit from the European Union was earlier set for March 29. Bottlers built up their inventory in advance of that date in case Dover and other U.K. ports were disrupted and delayed transport of beverage concentrate from Ireland through the U.K. to Western Europe, Mr. Quincey said in an interview. The Brexit deadline has been rescheduled for October.

Coca-Cola in the first quarter completed its $5.1 billion acquisition of British coffee-shop chain Costa and plans to launch its first ready-to-drink Costa products this spring, Mr. Quincey said. Costa serves its red-and-white cups of coffee in its roughly 3,800 cafes, including about 2,500 in the U.K. and a growing presence in China. The launch of new bottled Costa drinks will be concentrated in markets where the chain already has a presence, Mr. Quincey said.

Coca-Cola shares rose 2% in morning trading.

Kimberly Chin contributed to this article.

Write to Jennifer Maloney at jennifer.maloney@wsj.com

 

(END) Dow Jones Newswires

April 23, 2019 11:36 ET (15:36 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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