Coca-Cola Company’s annual report and the forward-looking statements are not pleasant reading. There are eight pages of volatile headings in their forward looking statements.
For example, in Venezuela, the company reports a $103 million dollar loss due to hyperinflation and the devaluation of their currency.
As the world’s largest beverage company, they own or license and market more than 500 nonalcoholic beverage brands in more than 200 countries.
Competition is heating up in their multiple geographic areas as more retailers are developing their own store or private label beverage brands.
Competitive products included nonalcoholic sparking beverages; various water products, including packaged flavored and enhanced waters, juices and nectars, fruit drinks and syrups and powdered drinks; coffees and teas; energy and sports and other performance-enhancing drinks; dairy-based drinks; etc.
PepsiCo, Inc. is a primary competitor, along with Nestle, DPS, Danone, Kraft Foods, Unilvever, and in certain areas the competition includes beer companies.
If that’s not enough for a corporation to worry over, the company recognizes that water is a main ingredient in substantially all their products and that this will be one of the key challenges facing the business due to water availability, quality and sustainability.
Government regulations are of concern, especially if there are any more like California’s Prop 65 which outlaws substances considered unsafe or should be subjected to warning labels.
Obesity and other health concerns may reduce demand or mean new taxes for some sugar-sweetened products due to increasing public concern.
Changing weather conditions affect price of agricultural commodities used in their products such as sugarcane, corn, beets, citrus, coffee and tea, due to their availability and affordability.
If interest rates rise, net income is negatively affected. In 2012, the company used 80 different currencies in addition to the U.S. dollar and the revenues all have to be translated in income and expense reports and can affect financial results.
The proposals to reform U.S. tax laws could significantly impact how U.S. multinational corporations are taxed on foreign earnings.
They worry about protecting their information systems against service interruptions, breaches of security. If these operations are disrupted, then their reputation may be damaged.
Unfavorable general economic conditions in the U.S. could negatively affect the affordability and consumer demand for their products or shift away to lower-priced products.
Unfavorable economic and political conditions in international markets could hurt the business due to disruptions in supplies and transportation.
Add to all these worrying events, there’s the renewal of collective bargaining agreements, or, if they or their bottling partners experience strikes, work stoppages or labor unrest, the business could suffer.
If all these, any the many more not listed, are keeping the corporate employees awake at night, the many proposed changes in the bottling regulations for nonrefillable containers is enough to make significant headaches.
Ah, so. Then, Coco-Cola could bring back those darling little green bottles some of us so fondly remember.