What's going on?

Coca-Cola might�ve seen a drop in sales in its third quarter, but that didn’t knock its mood: the drinks giant still reported better-than-expected results on Thursday.

What does this mean?

Both Coca-Cola�s revenues and profits beat analysts� forecasts, though expectations weren�t necessarily high: the drinks giant�s last earnings update revealed a 16% drop in the number of drinks sold versus the same time last year. Things were still shaky this time around, sure, but they�had�improved: the drop was only 4%.


Coke�s sparkling soft drinks category saw the smallest decline, while its teas and coffees saw the biggest. And that might inform its response to this year�s plummeting demand: the company is�cutting the brands it owns in half, so it can focus on the most popular and most promising of them. It might be hoping this � plus a slew of job cuts � will help it come out of the coronavirus crisis even stronger than before.

Why should I care?

For markets: Staples hold the economy together.

Companies that sell everyday essentials � i.e. consumer staples � are having a good quarter. Nestl� and Procter & Gamble both reported increased profits at the start of the week, while Unilever followed suit on Wednesday with its own better-than-expected results. In fact, the 4.4% growth of its organic revenues � which excludes the impact of foreign currency swings, as well as buying and selling parts of its businesses � was more than double what analysts had been expecting.�

The bigger picture: David versus Goliath.�

Customers have been flocking toward niche or private-label products in favor of big-name brands in recent years, and consumer staples have been struggling to respond. But with shoppers stocking up on big brands� more easily available products since the pandemic took hold, that trend�s broken down. Of course, there�s nothing to say it won�t pick up and hurt the big companies� bottom lines once again � another reason investors might want to start avoiding consumer staples.�