OF

COCA-COLA

COMPANY

TABLES OF CONTENTS

INTRODUCTION 3

DESCRIPTION OF BUSINESS 4

PRODUCTION 6

REVENUE 8

STOCK 9

MACRO AND MICRO FACTORS 10

SWOT 13
SUMMARY 14

REFRENCES 15

INTRODUCTION

Coca-Cola is a carbonated soft drink sold in stores, restaurants, and vending machines throughout the world. It is produced by The Coca-Cola Company of Atlanta, Georgia, and is often referred to simply as Coke (a registered trademark of The Coca-Cola Company in the United States since March 27, 1944). Originally intended as a patent medicine when it was invented in the late 19th century by John Pemberton, Coca-Cola was bought out by businessman Asa Griggs Candler, whose marketing tactics led Coke to its dominance of the world soft-drink market throughout the 20th century.

The company produces concentrate, which is then sold to licensed Coca-Cola bottlers throughout the world. The bottlers, who hold territorially exclusive contracts with the company, produce finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute and merchandise Coca-Cola to retail stores and vending machines. The Coca-Cola Company also sells concentrate for soda fountains to major restaurants and food service distributors.

The Coca-Cola Company has, on occasion, introduced other cola drinks under the Coke brand name. The most common of these is Diet Coke, with others including Caffeine-Free Coca-Cola, Diet Coke Caffeine-Free, Coca-Cola Cherry, Coca-Cola Zero, Coca-Cola Vanilla, and special versions with lemon, lime or coffee. In 2013, Coke products could be found in over 200 countries worldwide, with consumers downing more than 1.8 billion company beverage servings each day.

DESCRIPTION OF BUSINESS

The term,” “Company,” “we,” “us” and “our” mean The Coca-Cola Company and all entities included in our consolidated financial statements.

The Coca-Cola Company is the world’s leading owner and marketer of nonalcoholic beverage brands and the world’s largest manufacturer, distributor and marketer of concentrates and syrups used to produce nonalcoholic beverages. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries. Along with Coca-Cola, which is recognized as the world’s most valuable brand, we own and market four of the world’s top five nonalcoholic sparkling beverage brands, including Diet Coke, Fanta and Sprite.

We manufacture beverage concentrates and syrups, which we sell to authorized bottling and canning operations (to which we typically refer as our “bottlers” or our “bottling partners”) who use the concentrates and syrups to produce finished beverage products. We also manufacture, or authorize bottling partners to manufacture, fountain syrups, which we sell to fountain retailers such as restaurants and convenience stores, which use the fountain syrups to produce finished beverages for immediate consumption, or to fountain wholesalers or bottlers, which in turn sell and distribute the fountain syrups to fountain retailers. In addition, we manufacture certain finished beverages, such as juices and juice drinks and water products, which we sell to retailers directly or through wholesalers or other distributors, including bottling partners.

While most of our branded beverage products are manufactured, sold and distributed by independently owned and managed bottling partners, from time to time we do acquire or take control of bottling or canning operations, often, but not always, in underperforming markets where we believe we can use our resources and expertise to improve performance. In addition, we have noncontrolling ownership interests in numerous beverage joint ventures, bottling partners and emerging beverage companies. The Company has had a significant increase in the number of consolidated bottling operations over the last several years, primarily due to acquisitions in 2008 and 2007.

The Coca-Cola Company, a beverage company, manufactures and distributes coke, diet coke, and other soft drinks worldwide. The company primarily offers nonalcoholic beverages, including sparkling beverages and still beverages. Its sparkling beverages include non alcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavored waters. The company still beverages comprise non alcoholic beverages without carbonation, including noncarbonated waters, flavoured and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavoring ingredients, sweeteners, beverage ingredients, and fountain syrups, as well as powders for purified water products. In addition, the company licenses its technologies to suppliers and third parties. The Coca-Cola Company sells its products primarily under the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, Glacéau Vitaminwater etc brand names.

PRODUCTION

Ingredients

Carbonated water
Sugar (sucrose or high-fructose corn syrup depending on country of origin)
Caffeine
Phosphoric acid
Caramel color (E150d)
Natural flavoring

A can of Coke (12 fl ounces/355 ml) has 39 grams of carbohydrates (all from sugar, approximately 10 teaspoons), 50 mg of sodium, 0 grams fat, 0 grams potassium, and 140 calories.

Formula of natural flavorings

The exact formula of Coca-Cola’s natural flavorings (but not its other ingredients, which are listed on the side of the bottle or can) is a trade secret. The original copy of the formula was held in SunTrust Bank‘s main vault in Atlanta for 86 years. Its predecessor, the Trust Company, was the underwriter for the Coca-Cola Company’s initial public offering in 1919. On December 8, 2011, the original secret formula was moved from the vault at SunTrust Banks to a new vault containing the formula which will be on display for visitors to its World of Coca-Cola museum in downtown Atlanta.

A popular myth states that only two executives have access to the formula, with each executive having only half the formula. The truth is that while Coca-Cola does have a rule restricting access to only two executives, each knows the entire formula and others, in addition to the prescribed duo, have known the formulation process.

On February 11, 2011, Ira Glass revealed on his PRI radio show, This American Life, that the secret formula to Coca-Cola had been uncovered in a 1979 newspaper. The formula found basically matched the formula found in Pemberton’s diary.^{[53][54][55][56]}

Use of stimulants in formula

When launched, Coca-Cola’s two key ingredients were cocaine and caffeine. The cocaine was derived from the coca leaf and the caffeine from kola nut, leading to the name Coca-Cola (the “K” in Kola was replaced with a “C” for marketing purposes).

REVENUE

The Coca-Cola Company’s Minute Maid group North America offices in Sugar Land Town Square, Sugar Land, Texas, United States

According to the 2005 Annual Report, the company sells beverage products in more than 200 countries. The report further states that of the more than 50 billion beverage servings of all types consumed worldwide every day, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion (the latest figure in 2010 shows that now they serve 1.6 billion drinks every day). Of these, beverages bearing the trademark “Coca-Cola” or “Coke” accounted for approximately 78% of the company’s total gallon sales distributed as follows:

43% in the United States
37% in Mexico, India, Brazil, Japan and the People’s Republic of China
20% spread throughout the rest of the world

In 2010, it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales.

STOCK

Since 1919, Coca-Cola has been a publicly traded company. One share of stock purchased in 1919 for $40, with all dividends reinvested, would be worth $9.8 million in 2012, a 10.7% annual increase, adjusted for inflation.^[18] In 1987, Coca-Cola once again became one of the 30 stocks which makes up the Dow, the Dow Jones Industrial Average, which is commonly referenced as the performance of the stock market. It had previously been a Dow stock from 1932 to 1935. Coca-Cola has paid a dividend, increasing each year for 49 years. Stock is available from a direct purchase program, through Computershare Trust Company, but unlike many programs, has investment fees.

LOBBYING

In the U.S., Coca-Cola is a major lobbying force working to gain favorable legislation for the beverage industry. In both 2005 and 2006, it spent $1 million each year on lobbying. In 2007, that increased to $1.7 million, and by 2008, to $2.5 million. In 2009, total lobbying expenses jumped to $4.5 million, or nearly double the previous year. Much of the increased lobbying expenses are due to the industry’s fight against increased taxes on soft drinks and other sweetened beverages. For 2008, Coca-Cola had 38 lobbyists at 7 different firms lobbying on its behalf

MACRO AND MICRO FACTORS AFFECTING COCA COLA COMPANY

The macro factors were divided amongst Adrian, Emily and Zach; while Carlina and Mary looked at the micro factors.

MACRO FACTORS

POLITICAL – changes in regulations i.e. nutritional info on packaging – fluctuating exchange rates could result in a loss when trading overseas and sourcing materials.

SOCIAL – increased interest from consumers in a healthy lifestyle + knowledge of nutritional info – particularly sugar/fat content (Coca-Cola Company, 2009).

ECONOMIC

Recession, UK 2010 – positive influence on Coca-Cola’s retail sales. Sales reached £1 billion for ‘My Coke’ (Coca-Cola, Diet Coke and Coca-Cola Zero). This was the “first ever time that the combined sales of the three Coke brands have broken through the £1 billion barrier” (Coca-Cola Company, 2010).

LEGAL

Changes in income or corporation tax – increase in such taxes could negatively effect the financial position of Coca-Cola. Coca-Cola earns income in many foreign countries, not just the US. A reform to the US tax system changing corporation tax on foreign earnings, could adversely impact Coca-Cola’s financial results (Coca-Cola Company, 2012).

ENVIRONMENTAL

Challenged to use more sustainable and environmental friendly products for their packaging
Cans/bottles always state if they are recyclable and how to dispose of correctly
Bottles/cans which are recycled has a positive effect on environment

TECHNOLOGICAL

Do as much as they can on technological front – produced various applications for smartphones.
Recent app – Share a Coke – allowed users to create a digital can and send it to someone. This is a fun way to communicate with friends through the brand and is something that isn’t offered by counter brand Pepsi.

MICRO FACTORS

THE COMPANY

Strong work ethic – “…treat our people well, help them develop and give them a rewarding life.” Coca-Cola also excel in performance, develop skills and move towards their career goals. They were ranked No.26 in the Great Place to Work Institute (Coca-Cola, 2010).

CUSTOMERS

Coca Cola focus on “brand love”. Coca Cola believe that in the long-term that customer loyalty will strengthen their position.
“We know that we would only have sustainable growth if we are able to build relationships with our consumers, these relationships convert into sales” Muenster, Director of knowledge and insights (Warc, 2010)A ‘sound, stable and ethical supply’ are vital to continued success (Coca-Cola Company, 2013)

COMPETITION

Pepsi – 14% growth in net revenue in 2011 and has their brand distributed in over 200 countries. (PepsiCo, 2011).

Coca Cola and Pepsi are both competitive with their pricing.

Zach, Adrian, Carlina, Emily and Mary.

SWOT

Strength

World largest brand
Large Scale of operation
Robust Revenue growth in three segments

Weakness

Negative productivity
Sluggish performance in North America
Decline cash from operational activities

Opportunity

Acquisition intense competition
Growing bottled water market
Has sufficient capital to expand

Threats

Intense Competition
Dependendence on bottlling partners
Sluggish growth of carbon beverages

SUMMARY

The Coca-Cola Company, a beverage company, manufactures and distributes coke, diet coke, and other soft drinks worldwide. The company primarily offers non alcoholic beverages, including sparkling beverages and still beverages. Its sparkling beverages include non alcoholic ready-to-drink beverages with carbonation, such as carbonated energy drinks, and carbonated waters and flavoured waters. The company still beverages comprise non alcoholic beverages without carbonation, including noncarbonated waters, flavoured and enhanced waters, noncarbonated energy drinks, juices and juice drinks, ready-to-drink teas and coffees, and sports drinks. It also provides flavourring ingredients, sweeteners, beverage ingredients, and fountain syrups,

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as well as powders for purified water products. In addition, the company licenses its technologies to suppliers and third parties. The Coca-Cola Company sells its products primarily under the Coca-Cola, Diet Coke, Coca-Cola Light, Coca-Cola Zero, Sprite, Fanta, Minute Maid, Powerade, Aquarius, Dasani, Glacéau Vitamin water, Georgia, Simply, Minute Maid Pulpy, Del Valle, Ayataka, Bonaqua/Bonaqa, and Schweppes brand names. The company offers its beverage products through a network of company-owned or controlled bottling and distribution operators, as well as through independently bottling partners, distributors, wholesalers, and retailers.

References

Coca-Cola Company (2009) Coca-Cola China Sustainability Review. Available from: http://assets.coca-colacompany.com/16/60/e69bd11e47f4978bc2ef3753f178/EN_final_draft_for_web.pdf [Accessed 11 October 2013].

Coca-Cola Company (2010) Coke Winning In a Recession. Available from: http://www.coca-cola.co.uk/press-centre/2010/march/coke-winning-in-a-recession.html [Accessed 11 October 2013].

Coca-Cola Company (2012) Annual Report pursuant to section 13 or 15(d) of the securities exchange act of 1934. Available from: http://www.coca-colacompany.com/annual-review/2012/pdf/form_10K_2012.pdf [Accessed 11 October 2013].

Coca-Cola (2010) Employment: Our People. Available from: http://www.coca-cola.co.uk/about-us/employment-our-people.html
[Accessed 10 October 2013].

Warc (2010) Coca-Cola Focuses on “Brand Love”. Available from: http://www.warc.com/LatestNews/News/ArchiveNews.news?ID=26428
[Accessed 10 October 2013].

Coca-Cola Company (2013) About Our Suppliers. Available from: http://www.coca-colacompany.com/our-company/suppliers/suppliers [Accessed 13 October 2013].

PepsiCo (2011) 2011 Annual Report. Available from: http://www.pepsico.com/annual11/downloads/PEP_AR11_2011_Annual_Report.pdf [Accessed 13 October 2013].

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