Coca-Cola
This report will be based on the earnings conference call for Coca-Cola Company's Q3 2011 results.
The North American market is the largest and flagship market for Coca-Cola, but is not a major growth market for the company. Coca-Cola saw volume up 5% for the quarter and the year-to-date. Much of that was attributed to Dr. Pepper, with organic volume only being up 1% in Q3 and YTD. The company also saw significant success with Coke Zero, which was up 12% in the quarter, marking the 22nd consecutive quarter of double-digit growth for that product. Sparkling beverages were down for the quarter, but remain up for the year. Still beverages are up for the year, led by Powerade, which has seen 12% growth year to date. Gold Peak Tea has also seen double digit growth in the third quarter. Coca-Cola's investments in the mature North American market are focused on building new brands, as these are the primary growth drivers. Overall, North America because of its size remains a major contributor to total volume growth or decline, while the region is not as important a contributor to the firm's growth.
2. The drivers of profitability for the quarter are believed to be the strength of the brands. In many markets, the Coca-Cola brand has been a key growth driver, and it is the growth that continues to make the company profitable. While there are difficult economic...
New products in North America and new formats in China are partly responsible. The company has experienced 60% growth in non-alcoholic beverages in recent years, and this is a key driver of profitability.
As well, Coca-Cola has a strong relationship with its bottlers and that has allowed it to forge a strong partnership with its most important channel providers. Infrastructure investments, along with volume growth, are also seen as key drivers of profitability, and the company has made extensive investments in a number of markets. The company attributes this growth to "targeted investments" that it made in the past couple of years. The company believes that the assumptions of the company's 20/20 vision are driving its success. These assumptions include rapid population growth in the world, growth in the world's largest cities, and a growing global middle class. KO's plan is to ride the demographic wave. Channel strength and good positioning, including a strong brand, are all key success factors according to the company. KO is positioned as an accessible luxury for most consumers in the world.
Consistent vision is something that the company believes contributes to its success, because a consistent vision leads…
