Rahul Sharma (Editor)

The Coca Cola Company

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Covid-19
Type  Public
Revenue  41.86 billion USD (2016)
Industry  Beverage
The Coca-Cola Company httpslh3googleusercontentcom3o0qMaMvuwcAAA
Traded as  NYSE: KO DJIA Component S&P 100 Component S&P 500 Component
Founded  May 8, 1886; 130 years ago (1886-05-08) Atlanta, Georgia, U.S.
Founders  John Pemberton as Coca-Cola Asa Griggs Candler as The Coca-Cola Company
Area served  Worldwide except North Korea
Designated CEO  James Quincey (1 May 2017–)
CEO  Muhtar Kent (1 Jul 2008–1 May 2017)
Stock price  KO (NYSE) US$ 42.44 -0.16 (-0.38%)31 Mar, 4:01 PM GMT-4 - Disclaimer
Headquarters  Atlanta, Georgia, United States
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The Coca-Cola Company, which is headquartered in Atlanta, Georgia, but incorporated in Wilmington, Delaware, is an American multinational beverage corporation, and manufacturer, retailer, and marketer of nonalcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented in 1886 by pharmacist John Stith Pemberton in Columbus, Georgia. The Coca-Cola formula and brand were bought in 1889 by Asa Griggs Candler (December 30, 1851 – March 12, 1929), who incorporated The Coca-Cola Company in 1892. The company has operated a franchised distribution system since 1889, wherein The Coca-Cola Company only produces syrup concentrate, which is then sold to various bottlers throughout the world who hold exclusive territories. The Coca-Cola Company owns its anchor bottler in North America, Coca-Cola Refreshments.

Contents

The company's stock is listed on the NYSE (NYSE: KO) and is part of DJIA, the S&P 500 index, the Russell 1000 Index, and the Russell 1000 Growth Stock Index. As of 2015, its chairman and its CEO is Muhtar Kent. In December 2016, it was announced that James Quincey, the chief operating officer would replace Kent as CEO.

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Acquisitions

The company has a long history of acquisitions. Coca-Cola acquired Minute Maid in 1960, the Indian cola brand Thums Up in 1993, and Barq's in 1995. In 2001, it acquired the Odwalla brand of fruit juices, smoothies, and bars for $181 million. In 2007, it acquired Fuze Beverage from founder Lance Collins and Castanea Partners for an estimated $250 million. The company's 2009 bid to buy a Chinese juice maker ended when China rejected its $2.4 billion bid for the Huiyuan Juice Group, on the grounds the resulting company would be a virtual monopoly. Nationalism was also thought to be a reason for aborting the deal. In 1982, Coca-Cola purchased Columbia Pictures for $692 million. It sold the movie studio to Sony, for $3 billion, in 1989. In 2013, Coca-Cola finalized its purchase of ZICO, a coconut water company. In 2011, the Coca-Cola company bought the rest of the organic tea company Honest Tea, after buying a 40% stake in the company in 2008. In 2015, the company took a minority stake ownership in the cold pressed juice manufacturer, Suja Life LLC.

Revenue and sales

According to The Coca-Cola Company's 2005 Annual Report, the firm at that time sold beverage products in more than 200 countries. This is more countries than are generally agreed to exist, according to the World Atlas. The 2005 report further states that of the more than 50 billion beverage servings of all types consumed worldwide, daily, beverages bearing the trademarks owned by or licensed to Coca-Cola account for approximately 1.5 billion. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the company's total gallon sales. According to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows: 43% in the United States, 37% in Mexico, India, Pakistan, Brazil, Japan, and the People's Republic of China, and 20% spread throughout the rest of the world. The figure in 2010 showed that they sold 1.6 billion drinks every day. In 2010, it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales.

Stock

Since the 1920s, 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. In 1987, Coca-Cola once again became one of the 30 stocks which makes up the Dow Jones Industrial Average, which is commonly referenced as a proxy for stock market performance; 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.

Staff and management

The following are key management as of November 2016 (excluding VP positions and regional leaders):

The following are all directors as of November 2016:

Bottlers

In general, The Coca-Cola Company and its subsidiaries only produce syrup concentrate, which is then sold to various bottlers throughout the world who hold a local Coca-Cola franchise. Coca-Cola bottlers, who hold territorially exclusive contracts with the company, produce the finished product in cans and bottles from the concentrate in combination with filtered water and sweeteners. The bottlers then sell, distribute, and merchandise the resulting Coca-Cola product to retail stores, vending machines, restaurants, and food service distributors. Outside the United States, the bottlers also control the fountain business.

Since the early 1980s, the company has actively encouraged the consolidation of bottlers, with the company often owning a share of these "anchor bottlers".

Outside North America

The company's largest bottlers outside North America are:

  • Coca-Cola Amatil, based in Australia (Australia, New Zealand, Indonesia, South Pacific nations) (Company owns a share)
  • Coca-Cola European Partners PLC, based in the United Kingdom (western Europe) (Company owns share)
  • Coca-Cola Bottlers Philippines, Inc., based in the Philippines, a joint venture between the company and Coca-Cola FEMSA
  • Coca-Cola FEMSA, based in Mexico (parts of Mexico and Latin America) (Company owns share)
  • Arca Continental, also based in Mexico (parts of Mexico and Latin America) (independent)
  • Embotelladora Andina S.A, based in Chile (southern South America) (independent)
  • Coca-Cola Beverages Africa, based in Port Elizabeth, South Africa (southern and eastern Africa) (company owns share)
  • Coca-Cola Korea, based in South Korea (independent)
  • Coca-Cola HBC AG, originally based in Greece but now located in Switzerland (Greece, Eastern Europe, Russia, and Nigeria) (Company owns share)
  • Coca-Cola Icecek, based in Turkey (Turkey, southwest Asia, Arabia) (Company owns share)
  • Swire Group, based in Hong Kong (China, Taiwan, Hong Kong) (independent)
  • Kirin Company, based in Japan (independent)
  • In the United States

    In the United States, the company bypasses bottlers and is responsible for the manufacture and sale of fountain syrups directly to authorized fountain wholesalers and some fountain retailers.

    After purchasing the North American assets of Coca-Cola Enterprises, as of 2014 the company directly owns 100% of Coca-Cola Refreshments, the anchor bottler of Coca-Cola products in North America, representing about 90% of Canada and 80% of the United States.

    Other major bottlers in the United States are:

  • Coca-Cola Bottling Co. Consolidated, based in Charlotte, North Carolina (company owns share)
  • Coca-Cola Bottling Company of Northern New England based in Bedford, New Hampshire and owned by Kirin Company
  • Coca-Cola Bottling Company United, based in Birmingham, Alabama (independent)
  • Swire Coca-Cola USA, based in Salt Lake City, Utah and owned by Swire Group
  • In September 2015, the company announced the sale of several production plants and territories to Swire, Consolidated, and United, and creation of the Coca-Cola National Product Supply System which controls 95% of the territory in the United States.

    Consumer relations and civic involvement

    After Martin Luther King, Jr. won the 1964 Nobel Peace Prize, plans for an interracial celebratory dinner in still-segregated Atlanta were not initially well supported by the city's business elite until Coca-Cola intervened.

    J. Paul Austin, the chairman and CEO of Coca-Cola, and Mayor Ivan Allen summoned key Atlanta business leaders to the Commerce Club's eighteenth floor dining room, where Austin told them flatly, 'It is embarrassing for Coca-Cola to be located in a city that refuses to honor its Nobel Prize winner. We are an international business. The Coca-Cola Company does not need Atlanta. You all need to decide whether Atlanta needs the Coca-Cola Company.' Within two hours of the end of that meeting, every ticket to the dinner was sold.

    Throughout 2012, Coca-Cola contributed $1,700,500 to a $46 million political campaign known as "The Coalition Against The Costly Food Labeling Proposition, sponsored by Farmers and Food Producers". This organization was set up to oppose a citizen's initiative, known as Proposition 37, demanding mandatory labeling of foods containing genetically modified ingredients.

    Advertising

    Coca Cola advertising has "been among the most prolific in marketing history", with a notable and major impact on popular culture and society as a whole.

    The logo, bottle design, and brand image are internationally recognizable. Their product is ranked the number one soft drink, repeatedly, internationally, and has notoriety as the first soft drink consumed by astronauts in space. They employ a diverse range of integrated marketing communications to advertise through direct marketing, web based media, social media and sales promotions (Stringer, 2015).

    The company carefully considers all touch points a consumer (or prospective consumer) has with the brand as potential delivery channels for the brand's message, and makes use of all relevant communication systems. This well established, long standing, consistent approach has created a longing for the product that by far "superseded the desire for that typically associated with a drink to quench one's thirst" (Dudovskiy, 2015).

    Direct marketing

    They have exclusive vendor company partnerships, which eliminates competition, e.g. cinemas and restaurants only serving Coca Cola over Pepsi. At sponsored sporting events they again eliminate competition by attaining sole sale rights as well as VIP sales opportunities to important clients, e.g., baseball fields.

    Viral marketing

    The company also markets via mobile marketing in text messages, e.g.. viral marketing campaigns (Stringer, 2015).

    Web and social media

    They set the industry benchmark as the brand so universally recognized that audience building is unnecessary. Their fan engagement spans 86 million globally across social media channels. They deliver a consistently unified message whether it be through new products, online interaction, and social, cultural or sporting events (Stringer, 2015).

    Sales and promotions

    In the retail setting, direct store beverage delivery trucks (mobile advertising) as well as point of sale coolers and vending machines have bright red logo blazoned branding. In terms of food service, Coca Cola is a food pairing suggestion that is now ingrained as a food match, e.g., for popcorn, burgers, fries, and hot dog combos (Stringer, 2015).

    Products and brands

    The Coca-Cola Company offers more than 350 brands in over 200 countries, aside from its namesake Coca-Cola beverage.

    Columbia Pictures

    Coca-Cola bought Columbia Pictures in 1981 owing to the low monetary value of the studio. The film company was the first and only studio ever owned by Coca-Cola. During its ownership of the studio, the studio released many popular films including Ghostbusters, Stripes, The Karate Kid, and some others. However, after the 1987 film Ishtar, Columbia was sold to Tokyo-based Sony.

    World of Coca-Cola

    Coca-Cola operates a soft drink themed tourist attraction in Atlanta, Georgia; the World of Coca-Cola is a multi-storied exhibition. It features flavor sampling and a history museum, with locations in Las Vegas, Nevada and Lake Buena Vista, Florida.

    Tab

    Tab was Coca-Cola's first attempt to develop a diet soft drink, using saccharin as a sugar substitute. Introduced in 1963, the product is still sold today, although its sales have dwindled since the introduction of Diet Coke. The Tab soft drink is difficult to locate in recent times, due to its de facto replacement by Diet Coke.

    Other soft drinks

    The Coca-Cola Company also produces a number of other soft drinks including Fanta (introduced circa 1941) and Sprite. Fanta's origins date back to World War II during a trade embargo against Germany on cola syrup, making it impossible to sell Coca-Cola in Germany. Max Keith, the head of Coca-Cola's German office during the war, decided to create a new product for the German market, made from products only available in Germany at the time, which they named Fanta. The drink proved to be a hit, and when Coke took over again after the war, it adopted the Fanta brand as well. Fanta was originally an orange flavored soft drink which can come in plastic bottles or cans. It has become available in many different flavors now such as grape, peach, grapefruit, apple, pineapple and strawberry.

    In 1961, Coca-Cola introduced Sprite, a lemon-lime soft drink, and another of the company's bestsellers and its response to 7 Up.

    Coca-Cola South Africa also released Valpre Bottled "still" and "sparkling" water.

    In 1969, the company released Simba, which was a take on Mountain Dew, and had packaging that was African desert themed, replete with an African Lion as the symbol of the brand. The tagline was "Simba - It Cures the African Thirst."

    Also in 1969, the company released a line of products under the name of Santiba, which was targeted for mixing cocktails and party usage, products including Quinine water and Ginger Ale. Like the above-mentioned Simba, the Santiba line of products was short lived in the marketplace.

    BreakMate

    No longer manufactured, the Coca-Cola BreakMate was a three-flavour dispenser introduced by Coca-Cola and Siemens in 1988. Intended for use in offices with five to fifty people, its refrigerated compartment held three individual one-litre plastic containers of soda syrup and a CO2 tank. Like a soda fountain, it mixed syrup in a 1:5 ratio with carbonated water. In North America, Coca-Cola discontinued spare BreakMate parts in 2007 and stopped distributing the syrup in 2010.

    Healthy beverages

    During the 1990s, the company responded to the growing consumer interest in healthy beverages by introducing several new non-carbonated beverage brands. These included Minute Maid Juices to Go, Powerade sports beverage, flavored tea Nestea (in a joint venture with Nestle), Fruitopia fruit drink and Dasani water, among others. In 2001, Minute Maid division launched the Simply Orange brand of juices including orange juice. 2016, Coca-Cola India introduced Vio (flavoured milk) to enter into the value added dairy category, the product lays the foundation for Coca-Cola's new segment after Carbonated beverages, Water and Juices.

    In 2004, perhaps in response to the burgeoning popularity of low-carbohydrate diets such as the Atkins diet, Coca-Cola announced its intention to develop and sell a low-carbohydrate alternative to Coke Classic, dubbed C2 Cola. C2 contains a mix of high fructose corn syrup, aspartame, sucralose, and Acesulfame potassium. C2 is designed to more closely emulate the taste of Coca-Cola Classic. Even with less than half of the food energy and carbohydrates of standard soft drinks, C2 is not a replacement for zero-calorie soft drinks such as Diet Coke. C2 went on sale in the U.S. on June 11, 2004, and in Canada in August 2004. C2's future is uncertain due to disappointing sales.

    Starting in 2009, The Coca-Cola Company invested in Innocent Drinks, first with a minor stake, increasing to 90% in the first quarter of 2013.

    Best selling

    Coca-Cola is the best-selling soft drink in most countries, and was recognized as the number one global brand in 2010. While the Middle East is one of the only regions in the world where Coca-Cola is not the number one soda drink, Coca-Cola nonetheless holds almost 25% marketshare (to Pepsi's 75%) and had double-digit growth in 2003. Similarly, in Scotland, where the locally produced Irn-Bru was once more popular, 2005 figures show that both Coca-Cola and Diet Coke now outsell Irn-Bru. In Peru, the native Inca Kola has been more popular than Coca-Cola, which prompted Coca-Cola to enter in negotiations with the soft drink's company and buy 50% of its stakes. In Japan, the best selling soft drink is not cola, as (canned) tea and coffee are more popular. As such, The Coca-Cola Company's best selling brand there is not Coca-Cola, but Georgia. As of May 2016, The Coca-Cola Company has temporally ceased production of its signature drink in Venezuela due to sugar shortages.

    Information

    On July 6, 2006, a Coca-Cola employee and two other people were arrested and charged with trying to sell trade secrets information to the soft drink maker's competitor, PepsiCo for $1.5 million. The recipe for Coca-Cola, perhaps the company's most closely guarded secret, was never in jeopardy. Instead, the information was related to a new beverage in development. Coca-Cola executives verified that the documents were valid and proprietary. At least one glass vial containing a sample of a new drink was offered for sale, court documents said. The conspiracy was revealed by PepsiCo, which notified the authorities when they were approached by the conspirators.

    Green tea

    The company announced a new "negative calorie" green tea drink, Enviga, in 2006, along with trying coffee retail concepts Far Coast and Chaqwa.

    Glaceau

    On May 25, 2007, Coca-Cola announced it would purchase Glaceau, a maker of flavored vitamin-enhanced drinks (vitamin water), flavored waters, and Burn energy drinks, for $4.1 billion in cash.

    Huiyuan Juice

    On September 3, 2008, Coca-Cola announced its intention to make cash offers to purchase China Huiyuan Juice Group Limited (which has a 42% share of the Chinese pure fruit juice market) for US$2.4bn (HK$12.20 per share). China's ministry of commerce blocked the deal on March 18, 2009, arguing that the deal would hurt small local juice companies, could have pushed up juice market prices and limited consumers' choices.

    Coke Mini can

    In October 2009, Coca-Cola revealed its new 90-calorie mini can that holds 7.5 fluid ounces. The mini can is often sold in 8 packs. Despite costing nearly 30 percent more per ounce, the mini cans have been met with positive sales figures.

    Holiday can

    In November 2011, Coca-Cola revealed a seasonal design for their regular Coke cans as part of a partnership with the World Wildlife Fund. However it was withdrawn only a month after release due to consumer complaints about the similar look to the silver cans commonly used for Diet Coke. There were also complaints about deviating from traditional red as the color of Coca-Cola cans previously.

    Stake in Monster Beverage

    It was announced on August 14, 2014, that Coca-Cola Co is making a cash payment of $2.15 billion for a 16.7 percent stake in Monster Beverage Corp to expand its market for energy drinks. Coke's ownership in Full Throttle and Burn will be transferred to Monster. In return, Monster will transfer its ownership in Hansen's Natural Sodas and Peace Iced Tea to Coke. Muhtar Kent, Coke's Chief Executive Officer, stated that the company has the option to increase its stake to 25 percent but cannot exceed that percentage in the next four years.

    Sponsorship

    Coca-Cola's advertising expenses accounted for US$3.256 billion in 2011.

    Sports

    Coca-Cola sponsored the English Football League from the beginning of the 2004–05 season (beginning August 2004) to the start of 2010/11 season, when the Football League replaced it with NPower. Along with this, Coca-Cola sponsored the Coca-Cola Football Camp, that took place in Pretoria, South Africa during the 2010 FIFA World Cup, during which hundreds of teenagers from around the world were able to come together and share their love of the game, partly due to Best Buy's efforts through their @15 program.

    Other major sponsorships include NHRA, NASCAR, the PGA Tour, NCAA Championships, the Olympic Games, the NRL, the FIFA World Cups and the UEFA European Championships. Each Fall, Coca-Cola is the sponsor of the TOUR Championship by Coca-Cola held at East Lake Golf Club in Atlanta, GA. The TOUR Championship is the season ending tournament of the PGA TOUR. In the Philippines, it has a team in the Philippine Basketball Association, the Powerade Tigers.

    Television

    The company sponsored the popular Fox singing-competition series American Idol from 2002 until 2014.

    Coca-Cola is a sponsor of the nightly talk show on PBS, Charlie Rose in the US.

    Theme parks

    While not necessarily having naming rights to anything in all locations, the company does sponsor and provide beverages in many theme parks, usually in an exclusive capacity. This includes the Walt Disney Parks and Resorts, Merlin Entertainment, Universal Parks & Resorts, Six Flags, Cedar Fair, and SeaWorld Entertainment which are six of the nine largest theme park operators worldwide (it is unknown whether OCT Parks China, the Chimelong Group, or Fantawild, the fourth, seventh, and eighth largest theme park operators respectively, use Coca-Cola).

    The company also directly sponsors, with naming rights, the Coca-Cola London Eye and the Coca-Cola Orlando Eye.

    The company also operates "Coca-Cola" visitor centers in Israel and Turkey.

    References

    The Coca-Cola Company Wikipedia


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