Even though Coca-Cola (NYSE:KO) revenue has been trending downward for the past several years, its stock has managed to outperform the S&P 500 over the last twelve months. Investors may acknowledge a somewhat uncertain future for the company as soda consumption declines, but Asit Sharma and Vincent Shen dig into why investors have plenty of other reasons to love Coca-Cola stock in this clip from Industry Focus: Consumer Goods.

A full transcript follows the video.

This podcast was recorded on July 19, 2016.

Vincent Shen: Touching on the future of Coke and Pepsi after we've touched on some of the headwinds previously.  Asit, what are these companies doing if we're really diving into it in terms of setting themselves up for future success?  

Asit Sharma: Coke is a thirsty company right now. They're thirsty for brands which are not carbonated sweetened beverages which are what they call stills -- that is non-sparkling beverages. They're on the hunt to acquire minority interest or outright purchases of brands which are perceived as healthier by the consumer which have potential to grow. Some names which our listeners will be familiar with are Fairlife milk which has recently become available in grocery stores. Suja LLC is another company they've taken an interest in ... Aloe Gloe water.  

You can see these are very non-traditional brands for a company like Coke, but this is something that Coke has really been thinking through for the past several years. Investors perceive Coke as a cash cow. One of the strongest things about Coke is the fact that it's got this great predictable cash flow for decades and decades that's been on the back of carbonated beverages.  

What they're doing is they're transferring that predictability by acquiring smaller brands. Still today, about 75% of Coke's global unit volume is sparkling beverages. This statistic counterbalances that. There's this idea that we have to move into stills has taken hold of Coke's management team and now 14 out of 20 of Coke's billion dollar brands are actually still beverages.

The other thing that Coke's doing has been to launch a multi-year productivity initiative. They're seeking to find $3 billion in annual cost savings by the year 2019. Why are they doing this? They know they can't grow their organic revenues fast enough as soda volumes are falling, so they're sending a message to investors that while we solve this puzzle, we're going to deliver the earnings to you, and I think that's really helped prop the stock up over the last 12 to 18 months.

Asit Sharma has no position in any stocks mentioned. Vincent Shen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends PepsiCo. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.