Cosmos Bottling Corp. the beverage subsidiary of food giant RFM Corp. remains bullish on volume growth prospects this year despite continued weakness in the Philippine softdrinks market.
At the annual stockholders meeting of the company held yesterday, Cosmos chairman and chief executive officer Jose Concepcion III revealed that the company has regained its double digit growth rates of around 24 percent in the first three months of the year, amidst relatively flat industry growth. "This is a strong indication of the emerging sales volume trend of Cosmos this year," Conception said.
Cosmos earlier reported four percent sales volume growth in 1999, in the face of a 14 percent decline in industry volumes last year. Based on audited results, net sales of Cosmos in 1999 increased by 15 percent to P4.1 billion from P3.5 billion in 1998. Net income, however, reached only P522 million, three percent lower than the P540 million achieved in 1998, as a result of higher sugar prices and a doubling of marketing spending to support its brand-building efforts.
Cosmos president and chief operating officer Antonio Panajon said that, "the weak demand last year which was caused by a long and extended rainy season, precipitated a price war, with our competitors diving to match our prices. We made a strategic decision to defend our market share, and maintain our price levels throughout the year."
Cosmos put more aggressive marketing spending behind is flagship Pop Cola brand, and implemented better terms with its trade partners nationwide to defend its markets and sustain volume growth, company official said.
"Last year, we also changed our logo to emphasize a more dynamic and progressive-looking Pop Cola. To support that, we spent heavily on TV commercials featuring rising, talented young stars Cris Villonco and Billy Jo Crawford, whose well-received and highly-recalled endorsements helped boost our volumes," Panajon said.
"This year started right with a warmer January and what seems to be an early summer in February and March. Hopefully, this extends throughout the year, so that we go back to the high volume growth rates experienced during the El Niño year in 1998," Concepcion added.
Aside from Pop Cola, Cosmos makes and markets the Sarsi, Diet Sarsi, Sunkist Orange, Jaz Cola, and RC Cola brands of softdrinks. It recently launched Pop in cans, both regular and diet, which have been received well. It also produces the Aqua Prima brand of mineral water.
"I also foresee better margins, not only volumes, as sugar prices continue to decline. I am confident that the Year 2000 will be an even better for Cosmos," Concepcion added.
Cosmos also announced the declaration of P500 cash dividends during its special meeting, following the stockholders meeting.