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 10 Countries with the Highest Suicide Rates

The 10 Most Technologically Advanced Countries in the World

The 10 Safest Countries in the World to Live in Peace

The 10 Top Selling Smartphones in the World 2014

The 12 Biggest Shopping Centers in the World

The 10 Friendliest Countries in the World

Qihoo 360 Technology Co Ltd (QIHU), Actavis plc (ACT), Yahoo! Inc. (YHOO) Among 20 Long Ideas from Sohn Canada

The 10 Laziest Countries in the World

The 10 Most Polluted Countries in the World

The 10 Most Dangerous Cities in America 2014

The Top 10 Gold Producing Countries in the World

The 10 Tallest Buildings in the World

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

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

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!