Moody's: Olympics, World Cup to Favor Coca-Cola, AB-InBevMoody's: Olympics, World Cup to Favor Coca-Cola, AB-InBev
Coca-Cola, one of the largest advertisers of the Olympics and the exclusive soft drink partner of the games in Sochi, Russia, will benefit the most from its sponsorship of the Winter Olympics, Moody's said.
February 11, 2014
NEW YORKThe Winter Olympics and FIFA World Cup could help fuel growth in key emerging markets for The Coca-Cola Company and Anheuser Busch, Moody's Investors Service said.
Coca-Cola, one of the largest advertisers of the Olympics and the exclusive soft drink partner of the games in Sochi, Russia, will benefit the most from its sponsorship of the special event, the credit ratings and research company forecast in a Feb. 7 report.
Although Russia only comprises 2% of Coca-Cola's global volume, Moody's cited a significant opportunity for growth. According to Moody's, Coca-Cola reported a 4% increase in volumes in Russia through the first 9 months of last year, thanks in part to its sponsorship of the Olympics. In 2012, Coca-Cola, the world's largest beverage company, reported 20% volume growth in its Coca-Cola brand in Russia.
Special sporting events like the Olympics and World Cup collectively draw billions of viewers around the world, helping to boost brands that are sponsoring the events. NBC said its Olympics telecast on Saturday, Feb. 8 averaged 25.1 million viewers. In 2010, Moody's noted, more than 1.8 billion people viewed at least 1 minute of the Winter Olympics in Vancouver, Canada.
The World Cup is an even bigger draw, with 3.2 billion people or 46% of the world's population, having tuned in for at least 1 minute in 2010, Moody's said.
The soccer event draws interest in such emerging markets as Brazil, China, Indonesia, Mexico, Nigeria, Russia and Vietnam, Moody's said.
"Anheuser-Busch InBev and Coca-Cola and its local bottlers are the beverage companies best positioned to benefit from the 2014 FIFA World Cup hosted by Brazil," Moody's predicted in the report. "The benefits will likely boost revenue and earnings for these companies in Brazil and certain other Latin American markets by several percentage points year over year. However, they will also help to build brand value for these companies globally."
Still, such high-profile promotions occasionally draw criticism, as was the case with a commercial Coca-Cola ran during the Super Bowl and opening ceremony of the Winter Olympics in Sochi. The commercial features a multilingual version of "America the Beautiful" and people of diverse backgrounds including a gay family. The commercial is said to have infuriated conservative pundits in the United States, and the social networks were buzzing with comments supporting and criticizing Coca-Cola.
Tweeted Kevin Stankiewicz, editor-in-chief of a high school news site: "You don't need to speak English to enjoy the beauty of America. Coca-Cola proved that w/ their Super Bowl Commercial."
"For centuries America has opened its arms to people of many countries who have helped to build this great nation," a Coca-Cola spokesperson said.
The patriotic song "provides a snapshot of the real lives of Americans representing diverse ethnicities, religions, races and families, all found in the United States," the spokesperson added. "All those featured in the ad are Americans and America The Beautiful" was sung by bilingual American young women."
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