Chairman and Chief Executive Officer at Coca-Cola
Thanks, Tim, and good morning everyone. In the second quarter we delivered strong performance by continuing to execute on our growth strategy. Our industry remain robust and we gained both volume and value share in the quarter. Our first half 2022 results and the resiliency of our business give us confidence to raise our top line guidance. This is offsetting the meaningful increases in cost and currency headwinds to hold our bottom line US dollar outlook of 5% to 6% growth even as we accelerate investments in our business to drive future growth. These results are enabled by our organization's purpose-led culture, strong alignment with our bottling partners and the dedication and flexibility of our people while driving our growth agenda.
This morning, I'll discuss the current operating environment and how we are delivering results and building for the future in that environment and the progress on our sustainability agenda. Then John will discuss the financial details for the quarter and how we are building resilience to manage through external factors worldwide.
During the second quarter, the operating environment continues to be asynchronous with many moving parts. Some regions continue to experience broad-based macro strength while others are experiencing strong inflationary pressures. Some countries are still recovering from the pandemic while China experienced pandemic related lockdowns and the conflict in Ukraine is ongoing and we'd like to extend our thoughts and deepest sympathies to all of those who continue to be affected. With this as the backdrop, we have managed well with our bottlers and delivered robust revenue growth across all our geographic segments that encompasses strong pricing actions and strong volume performance helped by away from home recovery.
Consumer elasticities have largely held up better than expected year-to-date while we are watching closely for signs of changing consumer behavior as the year goes on and as the average cost of the consumer basket continues to go up. We expect the consumer environment to be more challenging and we are preparing accordingly, stepping up our investments, sharpening our resource allocation capabilities and tapping into data to better reach our consumers. We also recognize that the dollar strength is impacting our translated earnings and we remain committed to delivering U.S. dollar growth. As a system, we are focusing on expanding the circumference of what we can control, understanding and providing what consumers want, ultimately giving them more reasons to choose our great brands and driving value for our consumers, our customers and the industry.
Now recounting our Q2 performance across the world, starting with Asia Pacific. In India we delivered our best ever quarter volumetrically and added 1 billion incremental transactions in the quarter led by affordable single-serve packs. We gained share in sparkling soft drinks and juices and our system is continuing to invest in the marketplace availability and execution to capture growth. Japan made progress and recovery and we gained share and consumers year-to-date versus 2019. Additionally, we gained 7 points of share of visible inventory driven by coffee and tea in the MB [Phonetic] space. We continue to have a strong innovation pipeline with the launch of Ayataka [Indecipherable] latte, non-alcohol Lemon-Dou [Indecipherable] and Georgia Latte Nista.
Performance in China was under pressure driven by COVID lockdowns. Volume was down for all months in the quarter but the team persevered through a challenging environment and recovery began in June as most restriction started to lift. We focused on the core, prioritized top SKUs and reallocated resources to digital engagement, e-commerce and O2O as consumer demand shifted to at-home consumption.
In ASEAN and South Pacific, macro fundamentals remain strong despite ongoing supply chain headwinds. We added new consumers and transactions grew ahead of volume. We invested in consumer-facing marketing and improvement in execution and increased distribution across key entry packs and multi-packs.
Turning to EMEA. Europe saw strong volume performance leading to value share gains across total NARTD and online. Strong marketing campaigns including Coca-Cola, Zero Sugar Zero Words, What The Fanta 3.0 and Sprite Screen Time Messaging are tying our beverages to more consumption occasions with better results.
In Africa, we delivered strong performance and translates into any NARTD volume and value share gains. We continue to focus on stills, affordability and end market execution. Digital initiatives remained strong and gross merchandise value of our eB2B marketplace businesses were up approximately 50% sequentially. We accelerated cooler placement, reduced retail out of stocks and continued building RGM capability across markets.
In Eurasia and Middle East amidst an unprecedented inflationary environment, the industry is growing and the recovery of the on-premise channel is driving our growth. Through the FIFA World Cup trophy, we leveraged the iconic Coca-Cola trademark to generate significant media traction across the markets.
Turning to North America. We gained both volume and value share through the strength of our brands despite navigating a challenging supply chain including higher labor and freight costs. We continue to drive mixed improvement in sparkling soft drinks and more than doubled mini can availability on display. New product innovations including Coke Starlight, Fanta Dragon Fruit Zero Sugar and Minute Maid Aguas Frescas are showing promising early results. We're continuing to work closely with our bottling partners to accelerate overall commercial execution.
Turning to Latin America. We leverage compelling occasion based marketing campaigns and execution in the marketplace and our share losses improved sequentially. Coca-Cola Trademark focused on building meals and breaks rituals under the Real Magic platform with returnable packages as the main enabler, while in juice and dairy, we're focused on every day meals occasions. Our flavored alcoholic beverage business is growing strongly. We are gaining share in the direct-to-consumer business and now reaching approximately 6.3 million consumers by digital channels.
In Global Ventures, the Costa retail business was under pressure as footfall in the UK stayed below 2019 levels. However, the Costa Express platform remained robust and the launch of the new Frappe range in the UK drove growth.
Finally, our Bottling Investments Group delivered strong top line performance driven by our focus on recruitment through affordable entry packs, including a relaunch of returnable glass bottles in India. Additionally, we saw continued sparkling soft drink share gains with 2019 in the Philippines and Vietnam. While the macro environment is still asynchronous around the world, we are operating in an industry with a relatively predictable pattern of growth and attractive growth potential over the long term. So we are investing in our business and are anticipating the many futures as they come at us. We have managed a broad based recovery coming out of the pandemic. Our 5-year average organic revenue growth rate is at the top end of our long-term growth target of 4% to 6%, which is a proof point of our transformed and strengthened organization. As we look to the second half of the year, we will continue to focus on raising the bar on the elements of our flywheel the topline growth and as I said earlier, expand the circumference of what we can control, namely through building our strong portfolio of loved brands, excellence in revenue growth management and the power of our system execution.
We're making targeted investments to unlock our growth agenda. We built capabilities in brand building, innovation, RGM and execution, leveraging the power of scale while still being locally relevant to consumers. These investments enable us to win not only in today's environment but continue to build our business for the long term.
Our new marketing model is focused on adding and retaining consumers and we're doing this through an ecosystem of experiences that link consumption occasions with consumer passion points. The launch of the global Magic Weekends campaign with trademark Coke in partnership with more than 20 food service aggregators is showing great results. This campaign engages consumers' key moments from gaming to music to meal times. We are seeing 3.5 times retention levels for Coca-Cola combo meals versus pre-campaign levels and a 50% listed outlets with Coca-Cola Zero Sugar availability. We also launched end-to-end digital first brand campaigns for Smartwater and Vitaminwater. The snackable video content on social platforms, the Smartwater with global icon [Indecipherable] and the launch of Vitaminwater [Indecipherable] partnership on TikTok is a different engagement approach to marketing that is already delivering strong results across channels.
With new faces and new platforms for some of our billion dollar brands, we are creating excitement and recruiting a new generation of drinkers. We continue to strengthen our RGM capabilities which allows us to drive value for our consumers and our customers. RGM allows us to better navigate a dynamic consumer and retail environment using effective tools such as price and promotional intelligence to leverage the power of our brands, proactive mix management and premiumization and addressing affordability to drive recruitment and keep value conscious consumers. We work to bring these elements to life at a local level with our bottling partners. For example in India, we focused on segmented pricing, increasing prices of multiservice and premium packs while holding transaction driving price points in single-serve and the affordable portfolio. Additionally, we reached our highest ever outlet availability and drove a 4 point increase in single-serve availability and a 6 point increase in affordable pack availability.
In Europe, our system implemented several affordability and premiumization initiatives. We drove strong transaction and volume growth through initiatives like incentivizing multi-packs to drive value on a price per ounce basis for consumers and driving single-serve packages like cans and returnable glass bottles and HoReCa channels. By keeping transaction driving price points in play, we expanded our consumer base of sparkling soft drinks in the region year-to-date.
We are building consumer-centric loved brands and products and our improving excellence in execution extends to building a more sustainable future for our business and the planet. During the quarter, we released our fourth World Without Waste report, which provides an update on our ambitious sustainable packaging initiatives. It showcases how we are using our global reach and expertise to drive solutions at scale. Our operating units are further integrating sustainable practices into the business to drive growth. For example in the United States, we are executing a set of initiatives to help solve the plastic waste problem. We recently joined industry groups including the Consumer Goods Forum and the American Beverage Association to support our model Extended Producer Responsibility bill in Colorado. This is in addition to the support we provided for well-designed minimum recycled content legislation in 3 states. These have now been enacted into law.
Currently, 20 ounce bottles with Coca-Cola trademark The Summit in California, Texas, New York and throughout the Northeast are in a 100% recycled PET. In 2021, we launched a bold label clearly communicating that the bottles, excluding caps and labels, are made from a 100% recycled content, which is driving strong performance in the marketplace. Later this month, we will expand our use of 100% recycled PET throughout the U.S. and Canada. Every part of our business understands how their actions impact the company's wider sustainability goals and we continue to make progress.
To sum up, we are continuing to navigated a confluence of macroeconomic factors and our networked organization is embracing the resilience to weather many environments. Guided by our purpose and with the right strategy through our portfolio and the right execution capabilities, we are confident about delivering top line growth now and the long-term.
Before I turn the call over to John. I want to congratulate him for assuming the role of President beginning October 1 in addition to his current responsibilities to CFO. And of course, I also want to thank Brian Smith for his service and innumerable contributions to the system during his 25-year tenure with the company and wish him all the best for the future. So John, over to you.