The past year has been a rough one for Coca-Cola (NYSE:KO). Carbonated soft drinks are under fire from consumer health advocates in countries around the world, putting pressure on sales of Coca-Cola's primary beverage product. The long-term impact of changes in consumer awareness and policy action designed to curb the consumption of sugary beverages is yet to be known, but the market is already starting to give up on the company. Coca-Cola's stock has returned less than 4% year-to-date, compared to nearly 11% for the broader market.

KO Total Return Price Chart

Coca-Cola data by YCharts

Of course, the company hasn't given up on itself. Coca-Cola expects to spend $2.5 billion in 2014 to maintain and grow its business. It isn't enough just to spend the money; Coca-Cola needs to invest wisely to navigate a hostile future. Let's break down how the company is investing its cash flow.

A looming problem
Now that tobacco is on its way out, public health advocates are turning their attention to sugary beverages. With public pressure mounting against Coca-Cola and other sellers of unhealthy beverages, the company must adapt its product mix to changing consumer desires.

The dire circumstances of the carbonated soft drink market are evident in Coca-Cola's recent earnings reports. Per-capita consumption of all Coca-Cola beverages grew by 4.6% per year from 1992 through 2002 and 2.7% from 2002 through 2012. Actual beverage volume grew even faster over those time periods because the worldwide population was growing (thus creating a headwind for per-capita consumption).

However, global volume grew by just 2% in 2013 and per-capita consumption was even lower. The company is on pace for 2% volume growth through the first three quarters of 2014. Coca-Cola desperately needs to find a way to boost growth.

Coke Life is a reimagined reduced-calorie cola.

New carbonated products
Coca-Cola is expanding its soft drink offerings to help boost sales. While the company's overall beverage volume is growing by 2% per year, its carbonated soft drink volume is growing at 1% per year – creating an anchor on overall growth. Introducing new and exciting beverages could boost this growth rate.

For instance, Coca-Cola introduced Coke Life to limited U.S. markets earlier this year. The U.S. launch comes after success in South American test markets. The drink is marketed as a reduced-calorie, low-sugar cola sweetened with stevia and cane sugar instead of high fructose corn syrup. The move looks more like a rebranding effort than a reinvented product. With 22 grams of sugar per 330ml serving, Coca-Cola Life is still a sugary beverage. However, Coca-Cola's success in the industry is largely due to savvy and relentless marketing, so a reimaging effort could ease consumers' consciences and draw people back to soft drinks.

Investing in new channels
Coca-Cola is taking a multi-pronged approach to reigniting consumer interest in soft drinks. In addition to introducing new soft drinks, the company is investing in new channels through which it can distribute the beverages. Coca-Cola's investment in Keurig Green Mountain is part of an effort to deliver carbonated beverages directly to consumers via the Keurig Cold. Keurig's new system is due out sometime before fall 2015. Keurig's CEO says the company is "working closely with Coca-Cola Company to develop and perfect some of their brands for our system." A successful launch of Keurig Cold could be the spark needed to reignite interest in soft drinks, offsetting health concerns in the process.

Diversifying product mix
Finally, Coca-Cola understands that it needs to diversify beyond soft drinks in order to maintain adequate long-term growth. The company purchased a 16.7% stake in Monster Energy earlier this year and expanded its distribution agreement with the company, thereby boosting Coca-Cola's presence in the burgeoning energy drink market. As part of the deal, Coke transferred its energy drink business, including NOS, Full Throttle, Burn, Mother, Power Play, and Relentless, to Monster and Monster transferred its non-energy business, including Hansen’s Natural Sodas, Peace Tea, Hubert’s Lemonade, and Hansen’s Juice Products, to Coke.

Moreover, Coca-Cola is acquiring beverages deemed healthier -- like Zico coconut water -- to add to its growing portfolio of non-carbonated beverages, including well-known brands such as Minute Maid, Vitamin Water, Odwalla, and Powerade. The Wall Street Journal estimates that 40% of Coca-Cola's U.S. revenue comes from still beverages, making these products an important part of the company's growth going forward.

There are no easy solutions to Coca-Cola's growth problem, but the company is taking sensible steps to find an answer. Coca-Cola's investments in new carbonated soft drinks, new distribution channels, and new product categories are the company's best shot at reigniting growth in its beverage portfolio. Given enough time, shareholders may be rewarded for their patience.