Woolies and Domino's deal double blow to CCA

Coca-Cola Amatil has been hit with a double blow this morning, as it's revealed Woolworths is refusing to stock its new Coca-Cola No Sugar, and Domino’s, the nation’s largest pizza retailer, has decided to switch its allegiance to rival Pepsi.

New brand Coca-Cola No Sugar was supposed to gradually replace Coke Zero, but Woolworths has given the proposal the thumbs down.

Due to the similar appearance of the two and the competitive nature of shelf space, Woolworths says there simply isn’t enough shelf space for both products.

"We have taken the decision to not range this product at this time," a spokesperson for Woolworths told The Sydney Morning Herald. "Our customers looking for a no-sugar or low-sugar cola option have ample choice already in the category across a range of different pack sizes and formats", 

The absence of Coca-Cola No Sugar from Woolworth’s shelves will have a drastic effect on distribution of the brand, as the supermarket has a 36% share of the $90 billion supermarket industry.

Despite the setback, the spokesperson from Coca-Cola told SMH she was optimistic about the success of the No Sugar range.

"Taste tests show Coca-Cola No Sugar is actually preferred by Coca-Cola Classic drinkers to Coke Zero, and equally liked by Coke Zero drinkers," she said.

CCA is giving away two million free samples through different outlets in the next eight weeks, with the spokesperson adding that the product would be on "thousands" of shelves in other supermarkets and convenience stores. Woolworths main rival, Coles, not only stocks Coke No Sugar, is also actively promoting the brand.

Moreover, Woolworths confirmed it will continue to stock Coca-Cola Zero in its stores nationwide and plans to stock Coca-Cola No Sugar when Zero is actually axed, which is said to be next year.

Domino's replaces Coke with Pepsi

CCA has also lost a major contract to supply carbonated soft drinks and water to Domino's Pizza Enterprises to rival company, Pepsi/Schweppes.

It is believed that the loss of the multi-million dollar Domino's contract was a result of cost reduction, as Pepsi is cheaper than Coca-Cola products.

Deutsche Bank analyst, Michael Simotas told the Australian Financial Review the Domino's contract accounted for about one million cases of beverages a year, or about 0.3% of CCA's total Australian beverages volume.

However, Simotas speculates that the contract change is not personal as Domino’s seems to be actively cutting costs in all aspects of their business with plans to reduce pizza sizes, and charging 10% surcharge on Sundays. 

CCA continues to supply McDonalds, Subway, Hungry Jacks, and Red Rooster.