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August weather could put a pop in drink sales

Althea Chang
Big Data Download
August weather could put a pop in drink sales

The suffocating heat wave in the Northeast and Midwest is expected to continue this weekend, but relief is on the way for those areas, weather experts say. Forecasts for the rest of the summer could spell relief for beverage companies as well.

Early this summer, abnormal weather hit drink companies’ bottom lines, with Coca-Cola reporting weak sales growth in the second quarter. Pepsi, which announces second-quarter earnings next week, is likely to report a decline in beverage sales, mostly among bottled water and sports drinks, said Paul Walsh, vice president of weather analytics at The Weather Channel.

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"This is a case where weather really was a headwind for the beverage companies as we moved through Q2. It was very very cool, and it was very wet," Walsh noted, adding that this summer so far has been the sixth wettest on record for the east coast. "We know from the analysis that we've done that the weather has a significant influence on moving volumes. Especially for non-carbonated beverages," Walsh said.

But temperatures are expected to return to normal for most of the country this summer, with the exception of cooler-than-normal temperatures in the Southeast and warmer-than-normal temperatures in the Northwest, Walsh said, and that could improve drink sales for the rest of the summer.

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"We expect that the rest of the summer across most of the country is going to be seasonally warm, not extremely hot. We're seeing strong heat now, but that will taper off...over the next few weeks," Walsh said.

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