Sarah Thompson, Anthony Macdonald & Joyce Moullakis
July 25, 2017
AFR
Soft drinks maker Coca-Cola Amatil is about to suffer another big hit at the hands of supermarket giant Woolworths.
Street Talk can reveal that three of the five varieties of Coca-Cola Amatil’s flagship bottled water brand, Mount Franklin, are about to be removed from Woolworths’ shelves as the supermarket owner devotes more shelf space to its own private label products.
In Mount Franklin’s space is expected to be Woolworths’ Select brand, which sells for a fraction of the price and is a winner with shoppers who carry off slabs of 24-packs at bargain basement prices in seemingly bigger volumes as the category becomes a household staple.
It’s a blow for Coca-Cola Amatil, with bottled water making up about 20 per cent of the company’s total beverage sales.
And with the anti-sugar backlash hurting sales of its soft drinks, the last thing CCA needs is for 60 per cent of its bottled water products to be elbowed out of a big supermarket retailer.
Sources said the latest shelving iterations being planned for Woolworths are likely to see just two out of five Mount Franklin stock-keeping units staying intact.
A Woolworths spokesperson said last night that there had been a re-think of the bottled water shelf space. “Customers are purchasing a wide variety of water options and as the category continues to increase in popularity we will respond to meet our customers demands in the space.
The move comes as Coca-Cola Amatil is already reeling from the decision by Woolworths to not stock its new No Sugar variety of Coke.
It is understood there is no connection between Woolworth’s decision to stop selling No Sugar Coke and the move to shrink down the number of Mount Franklin items from five to two on “planograms” – industry talk for the diagrams sent to suppliers showing how particular items are going to be displayed on the shelves.
“Mount Franklin is the leading branded water in Australia, and we’re confident that it will stay that way,” a Coca-Cola Amatil spokesperson told Street Talk.
The most popular versions of Mount Franklin – the old-fashioned six packs and 20-packs of bottled water – are among those that are staying but it is likely to be a sore point among CCA investors.
Finally, BAML and UBS’ equities desk will be in the market for petrol station IPO Convenience Retail REIT on Tuesday. The brokers are expected to tell investors the IPO is already covered when they launch its institutional bookbuild.
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