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23-10-2011, 06:19 AM
The Straits Times
Oct 23, 2011
Coke sizzles despite fizzling US economy
Atlanta - In good times or bad, each of the planet's nearly seven billion people downs about seven non-alcoholic drinks every day.
That largely accounts for the fact that shares of the world's biggest beverage company - and most powerful brand - did not go flat as the rest of the market did when the United States economic recovery fizzled.
A CNN report showed that shares of Coca-Cola returned 4 per cent this year through Oct 17, against a loss of 2.9 per cent for the S&P 500, partly on the strength of Coke's overseas profits.
Coke is already the biggest provider of non-alcoholic drinks, as its sodas, juices and speciality drinks fill up 1.7 billion cups daily. Bullish investors point out that sales are growing fastest in the emerging markets.
Revenues in Asia, Latin America and the Pacific have all soared by double digits in the first half of the year. And Coke plans to invest US$4 billion (S$5 billion) in new plants in China by 2014, according to CNN.
Foreign opportunities are why Mr George Fraise has made Coke a top holding in his John Hancock US Global Leaders Growth.
'Coke has the best distribution network in the world,' he says.
Because of health and economic concerns, Americans have begun to kick the cola habit. Though fizzy drinks are still on the rise globally, US carbonated-soda sales have fallen 8 per cent since their peak in 2006, CNN reported.
The fear is that foreign markets may eventually follow the US lead. Mexico, long one of Coke's best markets, has started to discourage the sale of sodas in schools. And France has proposed a new tax on sugary drinks.
As an alternative, Coke has bought or started dozens of healthier lines, such as Minute Maid juices and Dasani water.
Many of those products, though, have lower profit margins, says Mr Gary Hemphill, senior vice-president of Beverage Marketing Corp.
Coke cemented its reputation as a defensive stock in the financial crisis when its shares lost less than the S&P 500.
And since 2008, the stock has risen nearly twice as much as the broad market - even returning 6 per cent during the summer slide, while rival Pepsi lost nearly 11 per cent.
Oct 23, 2011
Coke sizzles despite fizzling US economy
Atlanta - In good times or bad, each of the planet's nearly seven billion people downs about seven non-alcoholic drinks every day.
That largely accounts for the fact that shares of the world's biggest beverage company - and most powerful brand - did not go flat as the rest of the market did when the United States economic recovery fizzled.
A CNN report showed that shares of Coca-Cola returned 4 per cent this year through Oct 17, against a loss of 2.9 per cent for the S&P 500, partly on the strength of Coke's overseas profits.
Coke is already the biggest provider of non-alcoholic drinks, as its sodas, juices and speciality drinks fill up 1.7 billion cups daily. Bullish investors point out that sales are growing fastest in the emerging markets.
Revenues in Asia, Latin America and the Pacific have all soared by double digits in the first half of the year. And Coke plans to invest US$4 billion (S$5 billion) in new plants in China by 2014, according to CNN.
Foreign opportunities are why Mr George Fraise has made Coke a top holding in his John Hancock US Global Leaders Growth.
'Coke has the best distribution network in the world,' he says.
Because of health and economic concerns, Americans have begun to kick the cola habit. Though fizzy drinks are still on the rise globally, US carbonated-soda sales have fallen 8 per cent since their peak in 2006, CNN reported.
The fear is that foreign markets may eventually follow the US lead. Mexico, long one of Coke's best markets, has started to discourage the sale of sodas in schools. And France has proposed a new tax on sugary drinks.
As an alternative, Coke has bought or started dozens of healthier lines, such as Minute Maid juices and Dasani water.
Many of those products, though, have lower profit margins, says Mr Gary Hemphill, senior vice-president of Beverage Marketing Corp.
Coke cemented its reputation as a defensive stock in the financial crisis when its shares lost less than the S&P 500.
And since 2008, the stock has risen nearly twice as much as the broad market - even returning 6 per cent during the summer slide, while rival Pepsi lost nearly 11 per cent.
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