Coca-Cola Company

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Coca-Cola Company

The Coca-Cola Company is an American company with multiple branches worldwide making it a multinational beverage corporation, manufacturer, retailer and marketer of nonalcoholic beverage syrups and concentrates. Coca-Cola is headquartered in Atlanta, Georgia and is famous for its product Coca-Cola which was introduced in 1886. Coca-Cola was introduced by a pharmacist John Smith Pembert in 1886. In 1889 the Coca-Cola formula was introduced by Asa Griggs Candler who later incorporated the company. Since 1889 Coca-Cola has operated a franchise business or distribution system. The company was incorporated on 5 September, 1919. This company is own licenses to market more than 500 brands on non-alcoholic beverages. These beverages include a variety of sparkling beverages, juices, drinks and enhanced waters. Along with the above brands, the company owns a market range of non-alcoholic sparkling brands of beverages which are the Coca-Cola itself, Fanta, diet coke and sprite. Coca-Cola is listed in NYSE and is part of DJIA, S&P 500 index. The reigning Coca-Cola chairman is Mr. Muhtar Kent. As at December 2013, Coca-Cola had a total of 130,600 employees. Coca-Cola is a multinational company with branches and sub-branches all over the world. Its segments are Eurasia and Africa, Latin America, Europe, North America, Pacific, Bottling investments and Corporate. The company is characterized with great achievements and success with the recent achievements being the acquisition of the Great Plains Coca-Cola Bottling Company in the Great Plains of the Unites States in December 30, 2011. It also acquired the remaining interest in Honest Tea, Inc, and Great Plains in the year ended December 31, 2011. CITATION Dab13 l 1033 (Dabbagh, 2013) Other achievements are the acquisition of the additional interests in Coca-Cola Central Japan Company in the central district of Japan in December 2011. Other acquisitions were in September 2012 when it acquired an estimated 50 % equity of Aujan Industries’ business of beverages. That was followed by the announcements of Sacramento Coca-Cola Bottling Company that it had been fully acquired by the company in January 2013 and from February 22, 2013 the company acquired interest in Fresh Trading Company Ltd. It also acquired the ownership interest in ZICO beverages LLC in November 2013.

Coca-Cola manufactures markets and sells the concentrates of beverages. These are also known as syrups, bases which include fountain syrups still beverages which are finished sparkling. There are also bottling partners who buy the concentrates for fountain beverages. Coca-Cola sells many sparkling beverages like juices drinks, juices, sport drinks, energy drinks, teas and coffee of ready to drink nature, and specific water products. These are always sold to the retailers and distributors, bottling partners, and wholesalers who the n are tasked with distributing them to the retailers. This is always done outside United States. In the US, the company sells the fountain syrups to fountain retailers after manufacturing them. These retailers may include restaurants and large convenient stores that are capable of producing beverages for immediate consumption out of the fountain syrups. It also sells to its bottling partners that are tasked with reselling the syrups to the retailers and also some authorized fountain Wholesalers. CITATION Dab13 l 1033 (Dabbagh, 2013)

In the Latin American countries like Brazil, the company, Coca-Cola manufactures markets and sells brands like Leao/ Matte Leao teas. It however does so in a joint venture with its bottling partners. The year 2011 saw the company increase its sales in the Latin American countries when it introduced a variety of Brands, Brand extensions, and Beverage products. Brands such as Frigos Sabores Caserao were introduces. In the Pacific Fanta which is a sparkling fruit flavored beverage was introduced especially in Malaysia and Singapore. In Vietnam there was an introduction of Real Leaf which was a green tea based beverage. There was also introduction of the three flavor variant of the Georgia Emerald Mountain Ready to drink coffee Beverage and Burn Intense in South Korea. Powerade was launched by the Europe group in Norway, Denmark, France, and Sweden. Other brands that were launched were Cappy pulpy in Turkey and Fanta Powder in India by the Eurasia Group. In the East African market the company launched soft drinks like Schweppes Novida, and Malta drink. There was also introduction of cappy fruit bite in Egypt and Schweppes Gold Malta drink in Ghana. With the introduction of this major brand across the world the company was able to make approximate sales of 26.7 billion unit cases for its products.

The core products of the company are sparkling beverages such as the famous Coca-Cola, Fanta, Sprite, diet coke, among others. The company waters are Dasani, ice dew, Ciel among others.

Coca-Cola Company is in direct competition with Pepsi Company Inc, Nestle, Dr Pepper Snapple Group, Groupe Danone, Uniliver and Kraft Foods among others. Pepsi Co is the company’s major competitor within the beverage and food space. Coca-Cola is an unmatched global leader in its industry with a total of 500 carbonated and non-carbonated beverages. It has a global bottling operations and distribution channels worldwide. Coca-Cola and Pepsi have for years been engaged in rivalry over the market share as well as brand recognition. Pepsi on the other hand has the following advantages and strengths over the Coca-Cola Company: it has a consistent track record of balanced revenue generation and reinvesting in brands it also enjoys strong brand recognition as it is the number two player in the global beverage industry and a global leader in Salty snacks. This can be seen by its ownership of the two wellness and health brands, the famous Tropicana and Gatorade. Another advantage that the company has over its rival the Coca-Cola is the ability to sell both snacks and beverages that are complements in the food category. Pepsi is a threat to the Coca-Cola because of its operation in Canada, Russia, Mexico, and the United Kingdom. It also has very strong and emerging markets of like India, and China. There is huge role in the company’s played by product innovation. This can be seen through the regular creation of flavors from the existing products as well as maintenance of robust pipeline of the products. However the company’s North American market has been showing sluggish results because of the rising costs of raw materials which hurt the company’s margins.

COCA-COLA BOTTLING CO. CONSOLIDATED

CONSOLIDATED BALANCE SHEETS

In Thousands (Except Share Data)

 

      Dec. 29,2013      Dec. 30,2012  

ASSETS   

Current assets:       Cash and cash equivalents    $ 11,761       $ 10,399   

Accounts receivable, trade, less allowance for doubtful accountsof $1,401 and $1,490, respectively      105,610         103,524   

Accounts receivable from The Coca-Cola Company      17,849         15,521   

Accounts receivable, other      15,136         12,876   

Inventories      61,987         65,924   

Prepaid expenses and other current assets      26,872         33,068   

                 

Total current assets      239,215         241,312   

                 

Property, plant and equipment, net      302,998         307,467   

Leased property under capital leases, net      48,981         54,150   

Other assets      58,560         53,801   

Franchise rights      520,672         520,672   

Goodwill      102,049         102,049   

Other identifiable intangible assets, net      3,681         4,023   

                 

Total assets    $ 1,276,156       $ 1,283,474  

COCA-COLA BOTTLING CO. CONSOLIDATED

CONSOLIDATED BALANCE SHEETS

 

     Dec. 29,2013     Dec. 30,2012  

LIABILITIES AND EQUITY   

Current liabilities:      Current portion of debt    $ 20,000      $ 20,000   

Current portion of obligations under capital leases      5,939        5,230   

Accounts payable, trade      43,579        51,651   

Accounts payable to The Coca-Cola Company      25,869        27,830   

Other accrued liabilities      77,622        75,113   

Accrued compensation      31,753        32,428   

Accrued interest payable      4,054        4,060   

                

Total current liabilities      208,816        216,312   

                

Deferred income taxes      153,408        140,965   

Pension and postretirement benefit obligations      90,599        140,719   

Other liabilities      125,791        118,303   

Obligations under capital leases      59,050        64,351   

Long-term debt      378,566        403,386   

                

Total liabilities      1,016,230        1,084,036   

                

Commitments and Contingencies (Note 13)      Equity:      Convertible Preferred Stock, $100.00 par value:Authorized-50,000 shares; Issued-None      Nonconvertible Preferred Stock, $100.00 par value:Authorized-50,000 shares; Issued-None      Preferred Stock, $.01 par value:Authorized-20,000,000 shares; Issued-None      Common Stock, $1.00 par value:Authorized-30,000,000 shares; Issued-10,203,821 shares      10,204        10,204   

Class B Common Stock, $1.00 par value:Authorized-10,000,000 shares; Issued-2,737,076 and 2,716,956 shares, respectively      2,735        2,715   

Class C Common Stock, $1.00 par value:Authorized-20,000,000 shares; Issued-None      Capital in excess of par value      108,942        107,681   

Retained earnings      188,869        170,439   

Accumulated other comprehensive loss      (58,176 )      (94,526 ) 

                

     252,574        196,513   

                

Less-Treasury stock, at cost:      Common Stock-3,062,374 shares      60,845        60,845   

Class B Common Stock-628,114 shares      409        409   

                

Total equity of Coca-Cola Bottling Co. Consolidated      191,320        135,259   

Non-controlling interest      68,606        64,179   

                

Total equity      259,926        199,438   

                

Total liabilities and equity    $ 1,276,156      $ 1,283,474   

Consolidated Balance Sheet

PepsiCo, Inc. and Subsidiaries

December 28, 2013 and December 29, 2012

(in millions except per share amounts)

  2013   2012 ASSETS      

Current Assets      

Cash and cash equivalents $ 9,375   $ 6,297 Short-term investments 303   322 Accounts and notes receivable, net 6,954   7,041 Inventories 3,409   3,581 Prepaid expenses and other current assets 2,162   1,479 Total Current Assets 22,203   18,720 Property, Plant and Equipment, net 18,575   19,136 Amortizable Intangible Assets, net 1,638   1,781 Goodwill 16,613   16,971 Other nonamortizable intangible assets 14,401   14,744 Nonamortizable Intangible Assets 31,014   31,715 Investments in Noncontrolled Affiliates 1,841   1,633 Other Assets 2,207   1,653 Total Assets $ 77,478   $ 74,638        

LIABILITIES AND EQUITY      

Current Liabilities      

Short-term obligations $ 5,306   $ 4,815 Accounts payable and other current liabilities 12,533   11,903 Income taxes payable —   371 Total Current Liabilities 17,839   17,089 Long-Term Debt Obligations 24,333   23,544 Other Liabilities 4,931   6,543 Deferred Income Taxes 5,986   5,063 Total Liabilities 53,089   52,239 Commitments and contingencies   Preferred Stock, no par value 41   41 Repurchased Preferred Stock (171 )   (164 )

PepsiCo Common Shareholders’ Equity      

Common stock, par value 12/3¢ per share (authorized 3,600 shares, issued, net of repurchased common stock at par value: 1,529 and 1,544 shares, respectively) 25   26 Capital in excess of par value 4,095   4,178 Retained earnings 46,420   43,158 Accumulated other comprehensive loss (5,127 )   (5,487 )

Repurchased common stock, in excess of par value (337 and 322 shares, respectively) (21,004 )   (19,458 )

Total PepsiCo Common Shareholders’ Equity 24,409   22,417 Noncontrolling interests 110   105 Total Equity 24,389   22,399 Total Liabilities and Equity $ 77,478   $ 74,638 (Penzkofer, 2013)

Bothe companies looks financially sound with good profit margins. Coca-Cola is showing much more improved margins than the Pepsi. However its revenues are showing decreasing trends which calls for action. The company should be more concerned in increasing its revenues and decreasing its debts. Pepsi on the other hand is showing decreasing liabilities which is a good gesture. Its revenues are also decreasing but at a very slight level and therefore acts as a wakeup call for the company to increase on its revenues. The total debts of Pepsi is decreasing and that

Given the above information and the recent management of Pepsi and Coca-Cola company, we can dig into the absolute performance of the companies. The following graphs can help explain the position of the Pepsi Co, inc. and Coca-Cola Company (McGowan,2014).

From the chat, we can clearly see that Coca-Cola’s performance outstrips the performance of Pepsi by over 30%. This performance is as a result of the investment community concern towards the change in Pepsi’s corporate strategy towards health, wellness awareness that is enthusiasm for the company and looks to be unfounded.( Zach Investment Research)

It is not something new unique that Pepsi has been on the rise and winning the war against Coca-Cola in the New York Stock Exchange. However individuals are still clinging towards Coca-Cola when purchasing. People think that there is something else entirely to Pepsi than to Cola. Pepsi has also gained customer loyalty with many seeing only Pepsi on the shelves. With a combination of Beverage and Snack business, Pepsi is definitely a force to closely watch.

Fortunately for PepsiCo, more than 40% of its incomes originated from salt not sugar based things. Snacks promoted under Frito-Lay brands represent more than 60% of American salty nibble utilization. The organization likewise has Good-For-You and Better-For-You portfolios with lower fat and expanded nourishment alternatives that incorporate a few Quaker brands sustenance for wellbeing clients. According to Yahoo finance, with return of about 19% not long from now, PepsiCo’s profits have bested Coca-Cola’s 9% year-to-date execution. At that point it was reported that restaurant network Buffalo Wild Wings has exchanged beverage suppliers from Coca-Cola to Pepsi, planning to profit from the letters’ ties with the National Football League and Major League Baseball.

According to the recent surveys and the market trend in beverage industry in north America and as local deals slip and shimmering refreshments neglect to develop, Coca-Cola knows it has an issue and has even thought of an answer. Yet as shares sink lower, speculators appear unconvinced the drink behemoth’s arrangement is sufficient.

The Coca-Cola Company reported $12 billion in second from last quarter income, level from the same period a year ago. Joined with deals decreases in the initial two quarters of the year the organization’s year-to-date income is down 2%. Net wage for the quarter came in at $2.1 billion, down an astounding 14% from a year ago. At 48 pennies, profit every offer were 6 pennies underneath the year earlier outcomes and 4 pennies short of Wall Street examiners’ accord gauge.

In light of difficulties at home and in key business lines Coca-Cola reported a development arrangement Tuesday morning. In a different proclamation CEO Muhtar Kent said, “We have investigated our advancement to date and understand that while the methods we laid out toward the start of the year are on the whole correct, the extension and pace of our activities must increment. Notwithstanding reporting an extended gainfulness program, we are streamlining our operations and further adjusting our motivation arrangements to convey against our development targets.”

The arrangement incorporates an improved working model with a more prominent concentrate on nearby markets, going for $3 billion in “annualized funds” every year by 2019 and additionally refranchising most organization claimed North American packaging domains before the end of 2017 and an a significant number of the remaining regions by 2020. The organization will likewise recharge its emphasis on showcasing and will include income as a metric in its motivator arrangement (yahoo finance)

In light of difficulties at home and in key business lines Coca-Cola reported a development arrangement Tuesday morning. In a different proclamation CEO Muhtar Kent said, “We have investigated our advancement to date and understand that while the methods we laid out toward the start of the year are on the whole correct, the extension and pace of our activities must increment. Notwithstanding reporting an extended gainfulness program, we are streamlining our operations and further adjusting our motivation arrangements to convey against our development targets.”

The arrangement incorporates an improved working model with a more prominent concentrate on nearby markets, going for $3 billion in “annualized funds” every year by 2019 and additionally refranchising most organization claimed North American packaging domains before the end of 2017 and an a significant number of the remaining regions by 2020. The organization will likewise recharge its emphasis on showcasing and will include income as a metric in its motivator arrangement.

The unit case volume went up 1% for the quarter. The volumes in North America declined with 1% even with the 1% growth of International volume in the quarter, volume. A 5% decrease in unit case volume in Europe was somewhat balanced by 5% development in Eurasia and Africa, making it clear that a great part of the organization’s battles lie in created markets. General still drink volume was up 2% in the quarter, tea contributed 4% and both water and caffeinated beverages volume on an upward shift 7%. Shimmering drink volume was level for the quarter (Healy 2012).

References

Zach Investment Research

Dabbagh, A., Heidary Moghadam, A., Naderi, S., & Hamdi, M. (2013). A study on the effect of coke particle size on the thermal profile of the sinters produced in Esfahan Steel Company (ESCO). Journal of the Southern African Institute of Mining and Metallurgy, 113(12), 941-945.

Penzkofer, A. (2007). The Market of Pepsi/PepsiCo. Berlin: GRIN Verlag.

McGowan, C. (2014). The Fundamentals of Financial Statement Analysis as Applied to the Coca-Cola Company. Business Expert Press.

Healy, P., & Palepu, K. (2012). Business Analysis Valuation: Using Financial Statements. Cengage Learning.

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