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3 Areas Coca-Cola Investors Must Watch

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The Coca-Cola Company (NYSE: KO  ) is seemingly on top of the world. Its brand power is indisputable, and its global presence is massive. But increasingly fierce competition pops up and threatens the cola titan. I've created a premium report on Coca-Cola to help investors examine the company's future.

Below is an excerpt from the report, which lists three areas investors must watch closely. It's just a sample of one section, but we hope you find it useful.

1. Global growth
Macroeconomic headwinds threaten Coca-Cola's lofty growth goals of doubling revenues in a decade. Slowing GDP growth in China and other developing nations may threaten the company's aggressive growth targets.

2. Continued rising input costs
To supply many of Coke's beverages with the 10 teaspoons of sugar needed for each 12-ounce can, the company buys millions of tons of sugar annually. Most of this sugar comes from corn -- a key ingredient of high-fructose corn syrup. Historically, Coca-Cola has successfully hedged its vast commodity cost exposure, but the recent U.S. drought presents a challenge. Coke's input costs spiked significantly in 2012, and this trend could very well continue if demand outstrips supply.

3. Increased competition from industry disruptors
Israeli-based SodaStream (Nasdaq: SODA  ) is making serious inroads with its at-home soda-making system, both in the U.S. and overseas. SodaStream's products are currently available at megaretailers Wal-Mart and Best Buy, and will be available on supermarket and drugstore shelves in 2014. The company has its sights set on Coca-Cola and other traditional soda makers, even debuting "The Cage" marketing campaign, which reminds consumers of SodaStream's merits in reducing the number of plastic bottles in landfills. Coke's response has been threefold: threatening lawsuits against SodaStream for the use of Coke bottles in its marketing campaign, touting its own PlantBottle made partially from plants as opposed to petrochemicals, and rolling out its Coca-Cola Freestyle dispensing machines in more markets.

Looking for more help?
That was just a small taste of our new premium report on Coca-Cola. If you're trying to figure out whether the company is a buy or sell, the report is an indispensible resource for investors seeking more information. Also, the report comes with updated quarterly guidance so you'll stay in the know. To get started, simply click here.

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 25, 2012, at 10:41 AM, ebabes wrote:

    Competition is always there and Coke has stepped up every time. In reporting three negatives you failed to report that Coke has the worlds best distribution system, by far and away larger than any other beverage maker and that is why it is and will continue to be a dominator.

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10/21/2016 4:00 PM
KO $42.13 Up +0.20 +0.48%
Coca-Cola CAPS Rating: ****
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