The Coca-Cola Company (KO) & Fighting Obesity

Page 1 of 2

Soda makers have become bad guys in the US, Europe, and other developed nations. They are often held responsible for the growing obesity epidemic, which brings with it hordes of diseases like diabetes, heart problems, hyper tension and the list can go on.

As awareness increases, it is no surprise that soda giants like The Coca-Cola Company (NYSE:KO) and PepsiCo, Inc. (NYSE:PEP) are seeing falling sales in the world’s largest soda market – the US. Thus, the beverage makers have turned their attention to emerging nations like China, India and Brazil to fuel growth.

Recently, Coca-Cola announced its strategy to tackle the anti-obesity campaigns while at the same time driving growth in countries like China and India. Let us take a closer look.

Fighting obesity

They say “If you can’t beat them, join them.” And The Coca-Cola Company (NYSE:KO) seems to be doing just that.

It has said it will not advertise its products to children below the age of 12, it will support more physical activity programs, and will offer more zero- or low-calorie products in all the 200-odd countries where it operates. The company will also print the calorie counts clearly on its packaging.

The Coca-Cola Company (NYSE:KO) has been making such pledges from around 2007. It started with the US, in the UK it stopped advertising to children since 2009, and now it is intending to carry these initiatives across the world.

Timely move

The new pledges are aimed to improve the image of the company for sure but they have a deeper significance.

In today’s world obesity is not confined to the US and first world countries alone. The menace is rising at an alarming rate in the developing nations like India and China. With the growing middle-class population, there is a rise in people’s disposable incomes and also their propensity to indulge in fast food and soda.

According to World Health Organization, by 2015 50%-57% of the Chinese population will become either overweight or obese while in India it would be around 31% for adult men and 29% for adult women.

So, it is not rocket science that the future of the soda industry lies more in diet drinks and low-calorie drinks than the traditional sugar syrups. Already in China, healthy beverages have increased their market share while there has been a fall in the share of carbonated beverages last year. The Coca-Cola Company (NYSE:KO) wants to be right there when the demand for low-calorie soda starts gaining momentum.

Untapped markets

The appeal of markets like China and India lies in their huge 1 billion-plus populations. And the per-capita soda consumption is very low there compared to matured markets like the US.

The Coca-Cola Company (NYSE:KO) estimates that in the US, the annual per-capita consumption of Coca-Cola products is about 403 servings while it is 39 in China and only 12 in India. This opens up huge opportunities for the company.

As Coca-Cola increases its penetration of these markets it will make sure that there is adequate supply of low-calorie drinks. Currently, compared to the US where 41% of the total Coke sales is made up of zero calorie drinks like Diet Coke and Coke Zero, in China zero-calorie options make up no more than 10% of total sales. In some Chinese coastal cities the percentage is still in the high single-digit range.

Investments will continue

The Coca-Cola Company (NYSE:KO) is investing heavily in China and India. Last week it announced that it will pour $4 billion in China through 2014. The company will build a new plant in the country while investing in transportation and retail outlets. Coca-Cola is planning to grow China into its largest beverage market.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

Top 6 Cities For The Ultra Rich to Live in Comfort

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!