Coke is it -- it being the world's #1 nonalcoholic beverage company. The Coca-Cola Company (TCCC) owns four of the top five soft-drink brands (Coca-Cola, Diet Coke, Fanta, and Sprite). Its other brands include Minute Maid, Powerade, and Dasani water. In North America it sells Groupe Danone's Evian; it also sells brands from rival Dr Pepper Snapple Group (Crush, Dr Pepper, and Schweppes) outside Australia, Europe, and North America. The firm makes or licenses more than 3,500 drinks for sale in 200-plus countries. In late 2010 TCCC bought out its leading bottler, Coca-Cola Enterprises (CCE), and renamed it Coca-Cola Refreshments USA. Atlanta pharmacist John Pemberton invented Coke in 1886.
The deal, valued at $12 billion (including nearly $9 billion in debt), targeted CCE's North American operations and strengthens Coke's direct control of its distribution, enabling the beverage maker to get its products to market more efficiently and to respond more quickly to evolving customer preferences. (The newly-formed North American business system is expected to deliver at least $350 million in annual synergies by the end of 2014.) Coca-Cola Refreshments USA operates as a wholly owned subsidiary of TCCC. CCE's North American business accounted for about 75% of Coca-Cola's US product volume and nearly all of its Canadian product volume. Before the deal was completed, CCE generated about 15% of Coca-Cola's worldwide beverage sales. Its largest customer in North America was Wal-Mart. TCCC announced the buyout in early 2010, following rival PepsiCo's lead when it acquired its two largest bottlers.
Also as part of the CCE deal, a new company retaining the Coca-Cola Enterprises name was formed, and it was composed of its predecessor's European operations. The newly formed Coca-Cola Enterprises acquired TCCC's bottling units in Norway and Sweden and has the option to take over Coke's bottling division in Germany.
TCCC's net revenue rose more than 13% in 2010 vs. 2009 and net income was up about 73% over the same period. The number of unit cases of beverage products sold by TCCC rose more than 4% vs. 2009 to 25.5 billion. Unit case volume outside the US accounted for about 80% of TCCC's worldwide unit case volume, with Mexico, China, Brazil, and Japan accounting for about 31% of the beverage maker's worldwide unit case volume in 2010. The fizz in the company's financial performance reflected its purchase of CCE's North American business and the sale of the bottling operations in Norway and Sweden. The double-digit sales gain in 2010 followed a 3% decline in sales in 2009 vs. 2008.
In a bid to partner with another top-five soda supplier, TCCC in 2010 inked a 20-year deal with Dr Pepper Snapple Group valued at about $715 million. As part of the agreement, Coca-Cola will distribute the Dr Pepper brand throughout the US and Canada Dry in the Northeast, and it will distribute the Canada Dry, C'Plus, and Schweppes brands in Canada. The beverage brands were previously distributed by CCE.
TCCC owns 32% of Mexico's bottler Coca-Cola FEMSA and 23% of European bottler Coca-Cola Hellenic Bottling. FEMSA, now the largest independent Coke bottler following the CCE deal, has been expanding its operations and noncarbonated offerings. In 2011 it acquired Panama's Grupo Industrias Lácteas, a producer of milk, yogurt, ice cream, juices, and nectars.
Farther afield, in late-2011 TCCC agreed to acquire half of Aujan Industries' drink business in a deal valued at $890 million. Aujan, based in Saudi Arabia, is one of the Middle East's largest beverage companies with annual revenue of about $850 million. TCCC has announced plans to invest billions of dollars in the Middle East and North Africa over the next 10 years.
Responding to criticism that it sells unhealthy products, Coke acquired a majority stake in the UK smoothie maker innocent ltd, which controls more than two-thirds of the UK smoothie market, in 2010; although Coke's share of innocent is 58%, innocent's founders retained operational control of the company. The deal furthered Coke's European expansion plans and helps it grow its noncarbonated drinks business. In addition, the company is quick to point out that its portfolio contains more than 700 low- and no-calorie products. In a similar deal, Coke initially bought a 40% share in Honest Tea, the tea and organic beverage company, in 2008. In March 2011 Coke acquired the remaining stake in the firm and retained Honest Tea's founder and chief executive Seth Goldman to run the business.
Warren Buffett's Berkshire Hathaway owns nearly 9% of Coca-Cola's shares.