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

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

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

6 Ways 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

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

7 Bad Habits that Age You Beyond Your Years

The 40 Best Fortune Cookie Sayings That Will Leave You Bemused, Befuddled, or Beguiled

10 Foods to Eat Before a Workout to Make Every Drop of Sweat Count

The 5 Best Documentaries On Netflix You Must See

The Most Heartwarming and Inspirational Story Of This Halloween Season, It Will Make You Cry and Jump For Joy

10 Best Party Songs of All Time to Bring the House Down With

5 New World Order Conspiracy Theories that Will Strangle the World

The 10 Highest Rated Movies of 2014

The 10 Largest Container Shipping Companies in the World

The 10 Largest Armies in the World: Who Should We Be Afraid Of?

Best Warren Buffett Quotes on Money You Need to Hear

The 10 Highest Suicide Rates by Profession

The 20 Most Underrated Movies of All Time

The 10 Fastest Growing Companies in America

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!