The Grapevine

Why Coca-Cola Is Struggling Amid COVID-19 Pandemic

Per the latest report, American multinational corporation and manufacturer Coca-Cola revealed in its annual report that its supply chain had been disrupted because of the coronavirus.

Why is this so?

Artificial Sweetener Shortage

As the company that produces the world-famous carbonated drinks, Coca-Cola requires massive amounts of artificial sweeteners. However, many of these sweetening products that the company uses in its diet and zero-sugar drinks come from a Chinese supplier. And because of the current coronavirus outbreak, exports have been directly affected, meaning that the company’s production has been disrupted as well. What’s worse for the company is that if the outbreak continues to go on, even the sugar alternatives used by the company could be in an even shorter supply.

“We have initiated contingency supply plans and do not foresee a short-term impact due to these delays. However, we may see tighter supplies of some of these ingredients in the longer term should production or export operations in China deteriorate,” the company wrote in its report.

When it comes to production, the company listed sucralose as a "critical raw material," which is largely sourced from both China and the United States. As for sugar alternatives, Coca-Cola uses aspartame, acesulfame potassium, sucralose, saccharin, cyclamate and steviol gylcosides.

What’s even worse is that China, where the virus came from, is the company’s third-largest market when it comes to unit case volume. As such, the virus could affect their case volume by around 2 to 3 percentage points.

“The safety and health of the company's associates remains a high priority. The company has implemented precautionary measures to protect employees in China, which includes providing face masks and hand sanitizers; installing temperature screening in offices and manufacturing facilities; and setting up health monitoring mechanisms across the Coca-Cola system in China,” the company said in a statement.

Even without the coronavirus outbreak, however, an increasing number of people are choosing to avoid it and drink healthier alternatives, like tea or water, because studies are showing that those who drink the carbonated drink have a higher chance of developing long-term and life-disrupting disease.

Diet coke Diet sodas make you gain more weight. CorrieMiracle/Pixabay