The Coca-Cola Company

The Coca-Cola Company
Type Public (NYSE: KO)
Dow Jones Industrial Average Component
Industry Beverage
Founded 1892 (1892)
Headquarters Atlanta, Georgia, U.S.
Area served Worldwide
Key people Muhtar Kent
(Chairman and CEO)[1]
Products Coca-Cola
Carbonated Soft Drinks
Water
Other Non-alcoholic beverages
[2]
Revenue increase US$31.0 Billion (FY 2009)[3]
Operating income increase US$8.23 Billion (FY 2009)[3]
Net income increase US$5.82 Billion (FY 2009)[3]
Total assets increase US$48.7 Billion (FY 2009)[4]
Total equity increase US$24.8 Billion (FY 2009)[4]
Employees 92,800 (July 2010)
Website Official Website
One of the Coca-Cola Company's headquarters buildings in Atlanta

The Coca-Cola Company (NYSE: KO) is a beverage company, manufacturer, distributor, and marketer of non-alcoholic beverage concentrates and syrups. The company is best known for its flagship product Coca-Cola, invented by pharmacist John Stith Pemberton in 1886. The Coca-Cola formula and brand was bought in 1889 by Asa Candler who incorporated The Coca-Cola Company in 1892. Besides its namesake Coca-Cola beverage, Coca-Cola currently offers more than 400 brands in over 200 countries or territories and serves 1.6 billion servings each day.[5]

The company operates a franchised distribution system dating from 1889 where The Coca-Cola Company only produces syrup concentrate which is then sold to various bottlers throughout the world who hold an exclusive territory.

The Coca-Cola Company is headquartered in Atlanta, Georgia. Its stock is listed on the NYSE and is part of DJIA, S&P 500 Index, the Russell 1000 Index and the Russell 1000 Growth Stock Index. Its current chairman and CEO is Muhtar Kent.

Contents

History

The Coca-Cola Company was originally established in 1891 as the J. S. Pemberton Medicine Company, a co-partnership between Dr. John Stith Pemberton and Ed Holland.[6] The company was formed to sell three main products: Pemberton's French Wine Cola (later known as Coca-Cola), Pemberton's Indian Queen Hair Dye, and Pemberton's Globe Flower Cough Syrup.[6]

In 1884, the company became a stock company and the name was changed to Pemberton Chemical Company.[6] The new president was D. D. Doe while Ed Holland became the new Vice-President.[6] Pemberton stayed on as the superintendent.[6] The company's factory was located at No. 107, Marietta St.[6] Three years later, the company was again changed to Pemberton Medicine Company, another co-partnership, this time between Pemberton, A. O. Murphy, E. H. Bloodworth, and J. C. Mayfield.[6]

Finally in October 1888, the company received a charter with an authorized capital of $50,000.[6] The charter became official on January 15, 1889. By this time, the company had expanded its offerings to include Pemberton's Orange and Lemon Elixir.[6]

Acquisitions

China rejected a $2.4 billion bid from The Coca-Cola Company for the Huiyuan Juice Group on the grounds that it would be a virtual monopoly, although nationalism was also thought to be a reason for aborting the deal.[7] Rumours speculated that an American rejection of a bid for UNOCAL by a partly state-owned oil company played a part in the rejection.

Coca-Cola acquired the Indian cola brand Thums Up in 1993.[8]

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,[9] the company sells beverage products in more than 200 [10] 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. Of these, beverages bearing the trademark "Coca-Cola" or "Coke" accounted for approximately 78% of the Company's total gallon sales.

Also according to the 2007 Annual Report, Coca-Cola had gallon sales distributed as follows:

In 2010 it was announced that Coca-Cola had become the first brand to top £1 billion in annual UK grocery sales .[11]

Lobbying

In the US, 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.[12] For 2009, Coca-Cola has 38 lobbyists at 7 different firms lobbying on its behalf.[13]

Bottlers

Houston Coca-Cola Bottling Company

In general, The Coca-Cola Company (TCCC) and/or subsidiaries only produces (or produce) syrup concentrate which is then sold to various bottlers throughout the world who hold a Coca-Cola franchise. Coca-Cola 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 the resulting Coca-Cola product to retail stores, vending machines, restaurants and food service distributors.

One notable exception to this general relationship between TCCC and bottlers is fountain syrups in the United States, where TCCC bypasses bottlers and is responsible for the manufacture and sale of fountain syrups directly to authorized fountain wholesalers and some fountain retailers.

Criticism

The Coca-Cola Company has been involved in a number of controversies and lawsuits related to its relationship with human rights violations and other perceived unethical practices.

A number of lawsuits have been issued in relation to its allegedly monopolistic and discriminatory practices, some of which have been dismissed, some of which have caused The Coca-Cola Company to change its business practices, and some of which have been settled out of court.[14] It has also been involved in a discrimination case. There have been continuing criticisms regarding the Coca-Cola Company's relation to the Middle East and U.S. foreign policy.

An issue with pesticides in groundwater in 2003 led to problems for the company when an Indian NGO, Centre for Science and Environment, announced that it had found cancer causing chemicals in Coca-Cola as well as other soft drinks produced by the company, at levels 30 times that considered safe by the European Economic Commission. This caused an 11 percent drop in Indian Coca-Cola sales.[15][16] The Indian Health Minister said the CSE tests were inaccurate, and said that the government's tests found pesticide levels within India's standards but above EU standards.[17][18] The UK-based Central Science Laboratory, commissioned by Coke, found its products met EU standards in 2006.[19] Coke and the University of Michigan commissioned an independent study of its bottling plants by The Energy and Resources Institute (TERI), which reported in 2008 no unsafe chemicals in the water supply, though it criticized Coke for the impact of its water usage on local supply.[20]

The company has been criticised on a number of environmental issues. Critics claim that the company's overuse of local water supplies in some locations has led to severe shortages for regional farmers and the forced closure of some plants.[21] Packaging used in Coca-Cola's products have a significant environmental impact. However, the company strongly opposes attempts to introduce mechanisms such as container deposit legislation.[22]

There are charges that the Coca-Cola Company was involved in the violent repression of a union at several of its bottling plants in Colombia, South America. As of August 2005, when PBS's Frontline ran a story on the controversy, Coca-Cola strenuously denied all allegations of union-busting and murder of union leaders. Shareholders and U.S. colleges[23][24] have boycotted Coca-Cola to try to put pressure on the company to approve a full-scale, independent investigation of the charges.[25]

On 10 December 2008, the US Food and Drug Administration (FDA) wrote to Mr. Muhtar Kent, President and Chief Executive Officer, to warn him that the FDA had concluded that Coca-Cola's product Diet Coke Plus 20 FL OZ was is in violation of the Federal Food, Drug, and Cosmetic Act.[26]

In January 2009, the US consumer group the Center for Science in the Public Interest filed a class-action lawsuit against Coca-Cola.[27] The lawsuit was in regards to claims made, along with the company's flavors, of Vitamin Water. Claims say that the 33 grams of sugar are more harmful than the vitamins and other additives are helpful. Coca-Cola insists the suit is "ridiculous."

Products and brands

The Coca-Cola Company offers nearly 400 brands in over 200 countries, besides its namesake Coca-Cola beverage.

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, however its sales have dwindled since the introduction of Diet Coke.

The Coca-Cola Company also produces a number of other soft drinks including Fanta (introduced circa 1942 or 1943) and Sprite. Fanta's origins date back to World War II when Max Keith, who managed Coca-Cola's operations in Germany during the war, wanted to make money from Nazi Germany but did not want the negative publicity. Keith resorted to producing a different soft drink, Fanta, which proved to be a hit, and when Coke took over again after the war, it adopted the Fanta brand as well. The German Fanta Klare Zitrone ("Clear Lemon Fanta") variety became Sprite, another of the company's bestsellers and its response to 7 Up.

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.

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.

Coca-Cola is the best-selling soft drink in most countries. 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.[28] 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.[29] 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.[30] As such, the Coca-Cola Company's best selling brand there is not Coca-Cola, but Georgia.[31]

Some claim Coke is less popular in India due to suspicions regarding the health standards of the drink.

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.[32]

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

On May 25, 2007, Coca-Cola announced it would purchase Glaceau, a maker of flavored vitamin-enhanced drinks (vitamin water), flavored waters, and energy drinks, for $4.1 billion in cash.[33]

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[34]) for US$2.4bn (HK$12.20 per share).[35] 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.[36]

In October 2009, Coca-Cola revealed its new 90-calorie mini can that holds 7.5 fluid ounces.[37] The first shipments are expected to reach the New York City and Washington D.C. markets in December 2009 and nationwide by March 2010.[37]

Sponsorship

Coca-Cola has sponsored the English Football League since the beginning of the 2004-05 season (beginning August 2004). Other major sponsorships include NASCAR, the NBA, the PGA Tour, NCAA Championships, the Olympic Games, the NRL, the FIFA World Cups and the UEFA Euro, as well as the hit Fox singing-competition series American Idol. Coca-Cola is a sponsor of the nightly talk show on PBS, Charlie Rose in the US.

In video games

In PlayStation Home, the PlayStation 3's online community-based service, Coca-Cola placed a vending machine in Home that took users to a space called the "Georgia Break Station". The vending machine also distributed original avatar items and presented, along with "C-pons", digital coupons that could be used to get real drinks from real vending machines. This was to promote Coca-Cola's Georgia series of canned coffee. The space was a lounge where users could sit and chat and included two in-lounge avatars that told the users about the Georgia coffee. It was available from September 7, 2009 to December 17, 2009 in the Japanese version of Home.[38]

In Dreamcast's Shenmue in 1999, Coca-Cola was featured in the Japanese only version when the main character Ryo Hazuki finds vending machines on the street corners in the video game, and actual cans that were sold in Japan in 1986, the setting of the video game. Sometimes, Ryo gets a special can which can be turned in for prizes.

References

  1. ↑ "Board of Directors Elects Muhtar Kent Chairman". Press release. The Coca-Cola Company. April 23, 2009. http://www.thecoca-colacompany.com/presscenter/nr_20090423_muhtar_kent.html. Retrieved 2009-05-02. 
  2. ↑ Coca-Cola Products: New Coca-Cola Products, Brands of Beverages & More
  3. ↑ 3.0 3.1 3.2 Coca Cola Company (KO) annual SEC income statement filing via Wikinvest
  4. ↑ 4.0 4.1 Coca Cola Company (KO) annual SEC balance sheet filing via Wikinvest
  5. ↑ Coca-Cola - Press Center - Press Release
  6. ↑ 6.0 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 Reed, Wallace Putnam. "History of Atlanta, Georgia, with Illustrations and Biographical Sketches of Some of Its Prominent Men and Pioneers." Syracuse, NY: D. Mason & Co., 1889. p. 465-466
  7. ↑ "Coke's China juice move collapses". BBC News. 2009-03-18. http://news.bbc.co.uk/2/hi/business/7949903.stm. Retrieved 2010-05-25. 
  8. ↑ http://www.coca-colaindia.com/brands/brands_thumsup.aspx
  9. ↑ "Coca Cola Company Form 10-K 2005". SEC. http://www.sec.gov/Archives/edgar/data/21344/000104746906002588/a2167326z10-k.htm. Retrieved 2006-05-11. 
  10. ↑ this being somewhat more countries than are generally agreed to exist http://www.worldatlas.com/nations.htm
  11. ↑ "Coke sales first to top £1bn". Edinburgh Evening News. 19 March 2010. http://edinburghnews.scotsman.com/news/Coke-sales-first-to-top.6168087.jp. Retrieved 20 March 2010. 
  12. ↑ Center for Responsive Politics, Coca-Cola Company, Nov 20 2009
  13. ↑ http://www.opensecrets.org/lobby/clientlbs.php?year=2009&lname=Coca-Cola+Co&id= Center for Responsive Politics, Coca-Cola, Nov 20 2009
  14. ↑ "Daily Briefing". Atlanta Journal-Constitution: p. C2. 2001-05-11. "WKMX Inc., an FM radio station, filed a lawsuit, alleging that Atlanta-based Coca-Cola Co. and its biggest bottler stole the station's name and colors for its KMX energy drink. In a federal suit filed in Dothan, WKMX said it's the top station for young adult listeners in its market and has used those call letters since 1974." 
  15. ↑ http://www.businessweek.com/globalbiz/content/may2007/gb20070531_868198_page_3.htm
  16. ↑ http://www.business-standard.com/india/news/coke-sales-fall-11pesticide-controversy/159950/
  17. ↑ "India gives cola giants all-clear". CNN. 2003-08-21. http://edition.cnn.com/2003/WORLD/asiapcf/south/08/21/india.drinks/. Retrieved 2010-05-25. 
  18. ↑ George, Nirmala (2003-08-22). "Colas called safe, but not at EU standards". The San Diego Union. http://pqasb.pqarchiver.com/sandiego/access/387857181.html?dids=387857181:387857181&FMT=ABS&FMTS=ABS:FT&type=current&date=Aug+22%2C+2003&author=Nirmala+George&pub=The+San+Diego+Union+-+Tribune&desc=Colas+called+safe%2C+but+not+at+EU+standards&pqatl=google. 
  19. ↑ "UK experts say Indian Coke 'safe'". BBC News. 2006-08-14. http://news.bbc.co.uk/2/hi/south_asia/4789615.stm. Retrieved 2010-05-25. 
  20. ↑ "Water in Coca-Cola in India pesticide free". USA Today. 2008-01-15. http://www.usatoday.com/news/world/2008-01-15-999850862_x.htm. Retrieved 2010-05-25. 
  21. ↑ http://www.indiaresource.org/news/2005/1062.html
  22. ↑ Coca-Cola: Shareholder Resolution
  23. ↑ "Coca-Cola Ban Goes Into Effect at New York University". New York University - Office of Public Affairs. 2005-12-08. http://www.nyu.edu/public.affairs/releases/detail/866. 
  24. ↑ Warner, Melanie (2005-12-31). "U. of Michigan Becomes 10th College to Join Boycott of Cokepublicers". The New York Times. http://www.nytimes.com/2005/12/31/business/31coke.html. 
  25. ↑ "Background on Violence Against Union Members in Colombia". USLEAP. http://usleap.org/usleap-campaigns/colombia-murder-and-impunity/more-information-colombia/background-violence-against-. 
  26. ↑ http://www.fda.gov/ICECI/EnforcementActions/WarningLetters/2008/ucm1048050.htm
  27. ↑ http://www.cspinet.org/new/200901151.html
  28. ↑ "Coke and Pepsi battle it out". AME Info. April 8, 2004. http://www.ameinfo.com/37492.html. Retrieved 2006-05-11. 
  29. ↑ Terry Murden (January 30, 2005). "Coke adds life to health drinks sector". Scotland On Sunday (Scotsman). http://scotlandonsunday.scotsman.com/business.cfm?id=112872005. Retrieved 2006-05-11. 
  30. ↑ Japan Soft Drink Association
  31. ↑ Coca-Cola West Japan IR report (in Japanese), 2008.
  32. ↑ Day, Kathleen. "3 Accused In Theft Of Coke Secrets". The Washington Post. http://www.washingtonpost.com/wp-dyn/content/article/2006/07/05/AR2006070501717.html. Retrieved 2006-07-15. 
  33. ↑ Stanford, Duane (2007-05-25). "Coke to buy Glaceau in $4 billion deal". Atlanta Journal-Constitution. http://www.ajc.com/business/content/business/coke/stories/2007/05/25/0525bizcokedeal.html. Retrieved 2007-05-25. 
  34. ↑ Tucker, Sundeep (2009-03-17). "Coca-Cola’s $2.4bn China deal at risk". Financial Times (Hong Kong). http://www.ft.com/cms/s/0/daf851e8-1327-11de-a170-0000779fd2ac.html. Retrieved 2009-03-17. 
  35. ↑ "THE COCA-COLA COMPANY OFFERS TO BUY HUIYUAN JUICE GROUP". http://www.thecoca-colacompany.com/presscenter/nr_20080903_tccc_huiyuan_juice_grp_tender_offer.html. 
  36. ↑ Tucker, Sundeep (2009-03-18). "China blocks Coca-Cola bid for Huiyuan". Financial Times (Hong Kong). http://www.ft.com/cms/s/0/5c645830-1391-11de-9e32-0000779fd2ac.html. Retrieved 2009-03-18. 
  37. ↑ 37.0 37.1 Plumb, Tierney (October 14, 2009). "Coca-Cola to unveil mini cans in D.C.". Washington Business Journal/Bizjournals.com. http://washington.bizjournals.com/washington/stories/2009/10/12/daily45.html?ana=from_rss. 
  38. ↑ "Coca Cola Ties Up with Home". andriasang.com. http://www.andriasang.com/e/blog/2009/09/06/coca_cola_home/. 

External links

Varieties of Coca-Cola
Regular
Coca-Cola · New Coke · Caffeine-Free Coca-Cola · Coca-Cola Cherry · Coca-Cola with Lime · Coca-Cola Vanilla · Coca-Cola Citra · Coca-Cola Black Cherry Vanilla · Coca-Cola BlāK · Coca-Cola with Lemon · Coca-Cola Raspberry
Diet
Diet Coke/Coke Light · Coca-Cola C2 · Coca-Cola Zero · Coca-Cola Cherry Zero · Coca-Cola Light Sango · Diet Coca-Cola Cherry · Diet Coke Plus · Coca-Cola Orange
Powerade Tigers
Formerly the Coca Cola Tigers • Founded in 2001 • Owned by Coca-Cola Bottlers Philippines, Inc., subsidiary of The Coca-Cola Company
The franchise
Franchise • History • All-time roster • Draft history • Seasons • Current season
Coaches
Reyes • Ravanes • Altamirano • Favis • Duremdes • Perasol
Administration
Owner: Jose Baylon • General Manager: Kenneth Duremdes
Championships (2)
2002 All-Filipino • 2003 Reinforced
Finals appearances (4)
2002 All-Filipino • 2003 All-Filipino • 2003 Invitational • 2003 Reinforced
Seasons
2002 • 2003 • 2004-05 • 2005-06 • 2006-07 • 2007-08 • 2008–09 • 2009–10 • 2010–11
Coca-Cola buildings and structures
Office buildings
Candler Building (Atlanta) · Candler Building (New York City) · Coca-Cola Headquarters · Kansas City Building
Bottling plants
Atlanta (Georgia State University) · Baltimore · Cincinnati (Xavier University) · Columbia, Missouri (Ragtag Cinema) · Elmira, New York · Los Angeles · Ocala, Florida
Sports arenas
Coca-Cola Dome · Coca-Cola Field · Coca-Cola Park (Allentown) · Coca-Cola Park (Johannesburg) · Minute Maid Park
Billboard signs
Kings Cross, Sydney · Punto Obelisco, Buenos Aires · Times Square, New York · Piccadilly Circus, London
Other venues
Airport · Biedenharn Museum and Gardens · Coca-Cola Museum · Coca-Cola Olympic City · Epcot Club Cool · World of Coca-Cola