The Coca-Cola Co (KO)’s Growth Potential & Dividend Analysis

Per-Capita Emerging Market Growth

Here are two facts that show Coca-Cola’s growth potential:

– Coca-Cola sells just 3.5% the amount of beverages in India as it does in the US on a per capita basis.

– China only consumes about 10% the amount of Coca-Cola products as a US citizen does on a per capita basis.

These 2 countries alone are each about 4 times the size of the United States.

Keep in mind, Coca-Cola is much more than just a soda company.  The company currently has 20 brands with more than $1 billion in annual sales.  Of these 20 brands, 14 are non-carbonated.

If Coca-Cola can increase its per capita beverage consumption in these emerging markets, it will greatly expand revenues.

In both developed and emerging markets, consumption of still (non-carbonated) beverages are rising. The image below shows Coca-Cola’s per capita consumption by country:

Still Beverages Shine

International still beverage growth will drive Coca-Cola’s growth for the future.

The company has 14 still brands that do over $1 billion per year in sales. Coca-Cola has grown still volume 5% over the last 12 months. This is on top of 8% international still volume growth in the previous year (fiscal 2014).

Source:  Coca-Cola 2014 Back to School Conference Slide 6

The company has excelled in still beverages over the last several years. Coca-Cola has captured about 1/3 of global juice growth since launching its global juice center in 2007.

The company has a more than 2 to 1 lead on its nearest competitor in still beverages. Coca-Cola is focused on expanding its tea portfolio.

The company’s Fuze Tea brand recently joined the $1 billion a year in sales brand club.

Source:  Coca-Cola Back to School Conference Slide 18

Fuze is not the company’s only up and coming brand…

In addition to the company’s 20 $1 billion brands, Coca-Cola has around 20 up and coming brands that do between $500 million and $1 billion per year in sales.  Of these brands, over half are still beverages. Coca-Cola is looking to partnerships with innovative companies to bolster its strong brand portfolio.