Coca-Cola (KO -1.03%) is one of the world's most recognizable brands. It's been around since 1892, and serves more than 200 countries and territories. It has also been one of the top blue chip stocks on the market for quite some time, but the past five years have been underwhelming.
While the stock has underperformed the market over the past five years, the next five years look much better for the beverage giant. There are no guarantees in the stock market, and Coca-Cola isn't a stock I'd expect hypergrowth from, but its growth in non-U.S. markets is a reason for optimism.
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Regions like Latin America and the Asia Pacific area are beginning to experience income growth, giving people more money to spend on branded products like those Coca-Cola sells.
At its scale, Coca-Cola's volume is unlikely to increase substantially, but a key metric to focus on is price/mix. This is how it grows revenue -- by either increasing prices, or customers buying more expensive products (like Coca-Cola Zero versus Dasani). For example, a price/mix of 5 would mean Coca-Cola made 5% more revenue per unit sold compared to last year.
In the second quarter, Latin America and the Asia Pacific region boasted Coca-Cola's highest price/mix by a considerable margin. Their price/mixes were 15 and 10, respectively, while North America and Europe, the Middle East, and Africa (grouped together) were both 3.
This high price/mix in those emerging markets is a testament to Coca-Cola's pricing power and ability to adapt its offerings based on regional wants and needs. If this trend continues over the next five years, Coca-Cola should be in good shape.
