Admittedly, I'm not a committed soda drinker, but when I do crack open a can of pop, chances are that it's Coca-Cola's
Last quarter, I began the quarterly wrap by highlighting Coke's top spot on Interbrand's global brand list. During this quarter's conference call, CEO Muhtar Kent underscored the power of the company's brand, noting that the Coca-Cola Facebook page has more than 22 million fans, which Kent noted is roughly equivalent to the average viewership for American Idol. Now, if only American Idol could keep up that kind of loyalty for 100 years or so! (I'm not sure even Randy will hang around that long.)
This is a very central issue, because Coke's brand power translates to profits for shareholders. Recently, I've watched the results from major consumer goods companies like Sara Lee
Worldwide volume growth was 6%, with organic revenue growth in the North American market up 3%, which is particularly impressive for that very mature segment. The company reported that it grew both volume and value share around the world, which shows the company continuing to strengthen its global position against archrival PepsiCo
I fully expect Coca-Cola to keep delivering on its "2020 Vision," which targets doubled system revenue and increasing margins between 2010 and 2020.
In the near term, profit may encounter some headwinds, since Coke faces the same rising commodity prices now pinching the consumer-goods companies mentioned above, in addition to other food-focused businesses like McDonald's
On the growth front, emerging markets have been a big winner for Coke. During the fourth quarter, volume growth in Russia rose 31%, India grew 12%, and Brazil gained 7%. Growth in these and other emerging markets will likely continue. Interestingly, volume in China actually fell 3% during the quarter; the company said that this relative slump follows a 29% jump in last year's fourth quarter, and that growth in China tends to be choppy.
Productwise, Bloomberg reported that the company will be putting particular effort into growing its dairy business. Perhaps that's not surprising, following PepsiCo's purchase of a majority stake in Wimm-Bill-Dann
Buy, sell, or snooze?
For investors, the quarter adds up to a whole lot of the same. Coca-Cola is a strong, solid, reliable company -- and it's priced that way. Hanging onto Coke shares will very likely result in decent but dependable returns. Those seeking higher-return opportunities may want to search elsewhere.
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Coca-Cola is a Motley Fool Inside Value choice. Coca-Cola, PepsiCo, and Procter & Gamble are Motley Fool Income Investor picks. Motley Fool Options has recommended a diagonal call position on PepsiCo. The Fool owns shares of 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.
Fool contributor Matt Koppenheffer owns shares of McDonald's, but does not own shares of any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or on his RSS feed. The Fool’s disclosure policy prefers dividends over a sharp stick in the eye.