ASSESSESSMENT ON THE IMPACT OF CLIMATE CHANGE ON THE SALES PERFORMANCE OF CONSUMER GOODS: A CASE STUDY OF COCA-COLA PLC

1.1Background to the Study Weather has been found to influence human behavior in various ways. In some instances, it affects overall societal behavior, as seen when Hurricane Katrina necessitated the temporary evacuation of New Orleans in 2005. In other cases, weather impacts specific consumption behaviors—such as clothing choices, which vary between seasons. Beyond these observations, academic research has documented how weather variables influence human behavior in multiple domains. For example, studies in financial economics suggest a correlation between weather patterns and stock market performance, potentially due to weather-induced changes in mood (Saunders, 1993; Trombley, 1997; Hirshleifer & Shumway, 2003; Goetzmann & Zhu, 2005). Scientists describe this process as “natural climate change” (McCarthy, 2002). These natural shifts have led to periods of glaciation, during which vast areas were covered by ice, and warmer phases marked by significantly higher sea levels. The present era—known geologically as the Holocene—has been characterized by a relatively warm and stable climate for the past 11,700 years, a condition that has enabled human civilization to thrive (Dansgaard, 1993). Researchers like Cao and Wei (2005) and Kamstra et al. (2003) further argue that shifts in mood brought about by weather conditions can explain such financial behaviors. Additionally, sociological studies have linked higher temperatures with increased rates of violent crimes such as assault and homicide (Cohn, 1990a, 1990b). Other research has identified associations between barometric pressure changes and suicide rates, as well as reduced wind speeds and heightened mental health concerns (Barker et al., 1994; Stoupel et al., 1999). Moreover, laboratory experiments have demonstrated that simulated sunlight can alleviate symptoms of Seasonal Affective Disorder (SAD) in both diagnosed and undiagnosed individuals (Kripke, 1998; Stain-Malmgren et al., 1998). Despite the growing body of evidence across finance, psychology, and sociology, the marketing field has paid relatively little attention to how weather affects consumer behavior. Yet anecdotal evidence suggests that some firms have long considered weather in their sales forecasting models. For instance, Wal-Mart revised its sales projections in June 2006 due to unseasonably cool weather, which dampened demand for products like air conditioners and pool supplies. Coca-Cola has also explored innovations such as vending machines that automatically adjust prices based on ambient temperature, raising the price of cold drinks during hotter weather (King & Narayandas, 2000). Nonetheless, academic exploration into how weather influences consumer spending behavior remains limited (Parker & Tavassoli, 2000; Parsons, 2001; Steele, 1951). This study distinguishes itself by employing a mixed-methods approach and diverse data sources to examine this issue, aligning with Winer’s (1999) recommendation that consumer behavior research should balance internal and external validity. It is critical not only to determine how weather affects purchasing decisions in controlled environments but also to verify whether such effects persist in real-world retail settings. Significantly, this research advances the field by moving beyond simply establishing that weather impacts consumer behavior—it proposes and tests the psychological mechanism behind this relationship. Specifically, the study investigates how negative affect (unpleasant emotional states) mediates the effect of weather variables—like sunlight—on consumer spending. Interestingly, the findings reveal that only negative affect significantly mediates the relationship; changes in positive affect do not show any notable influence on consumer purchasing behavior. 1.2 Statement of the Problem The consequences of climate change present both direct and indirect challenges for businesses. Direct impacts involve the immediate effects on company operations and their associated supply chains, transportation, and distribution systems. These may manifest as damage to infrastructure, including trade ports, due to more frequent extreme weather events or the gradual rise in sea levels (Hirshleifer, 2003). Additional challenges, such as the retreat of polar ice caps due to rising global temperatures, can disrupt established shipping and trading routes, necessitating the exploration of alternative and more resilient pathways. Indirectly, climate change can affect businesses by altering the fundamental inputs of production—namely land, labor, and capital. These changes can reduce productivity, shift the dynamics of labor markets, and increase costs, all of which can profoundly influence how goods and services are produced and delivered. As a result, both the direct and indirect repercussions of climate change are likely to affect a country’s or region’s comparative economic advantage. In this context, it becomes essential to examine how these evolving climatic conditions influence the sales performance of consumer goods. Changes in climate patterns could reshape consumer needs, disrupt product availability, and impact purchasing behavior. Given this background, the current study aims to explore the effects of climate change on the sales of consumer products, with particular attention to Coca-Cola Nigeria Plc—a company operating in a market increasingly exposed to environmental shifts and their associated economic implications (King, 2000). 1.3 Research questions The following questions have been prepared for the study 1. Does climate change affects the sales volume of Coca cola product? 2. Does climate change influence consumer buying behaviour of coca cola? 3. Does climate change have an effect on the distribution chain of coca cola product? 4. Does climate change have an effect on labour force of coca cola company. 1.4 Objective of the study The general objective of the study is to assess the Impact of Climate Change on the Sales Performance of Consumer Goods: A Case Study of Coca-Cola Nigeria Plc. The specific objective that will guide the study is as follows: 1. To examine if climate change affects the sales of Coca cola product. 2. To find out if climate change influence consumer buying behaviour of coca cola. 3. To evaluate if climate change will have an effect on the distribution chain of coca cola product. 4. To assess if climate climate change have an effect on labour force of coca cola company. 1.5 Research hypotheses The following hypothesis have been formulated for the study H0: climate change does not affects the sales of Coca cola product HA: climate change affects the sales of Coca cola product H0: climate change does not influence consumer buying behaviour of coca cola. HA: climate change influence consumer buying behaviour of coca cola. H0: climate change does not have an effect on the distribution chain of coca cola product HA: climate change have an effect on the distribution chain of coca cola product H0: climate change does not have an effect on labour force of coca cola company. HA: climate change have an effect on labour force of coca cola company 1.6 Justification \ Significance of the study This study examines the effect of climate change on the sales of consumer goods. Hence it will be significant to the following: Management of coca cola company: this study will be significant to the management of the coca cola company as they will be exposed to the implication of climate change on the sales of their product Academia: this study will be of benefit to the academic community as it will contribute to the existing literature on the effect of climate change on the sales of consumer goods. 1.7 Scope of the study This study will examine if climate change affects the sales of Coca cola product. The study will also find out if climate change influence consumer buying behaviour of coca cola. The study will further evaluate if climate change will have an effect on the distribution chain of coca cola product. Lastly, the study will assess if climate climate change have an effect on labour force of coca cola company. 1.8 Limitations of the study As with many other research endeavors, this study encountered several challenges. One of the primary difficulties was the lack of readily available and accurate materials relevant to the topic under investigation, as well as the inability to obtain sufficient data. The researcher also faced financial limitations, which created obstacles in sourcing appropriate materials and in carrying out the printing and compilation of questionnaires. In addition, time constraints posed another significant challenge. The need to balance the demands of writing the research with other academic responsibilities made the research process particularly strenuous and demanding for the researcher. 1.9 Definition of terms Climate change: a long-term change in the average weather patterns that have come to define Earth's local, regional and global climates Sales: the exchange of a commodity for money; the action of selling something. Consumer: a person who purchases goods and services for personal use Goods: things to be transported, as distinct from passengers