Coca-Cola hopes to double its business in the next decade
In mid-November 2009 Mr Kent unveiled goals that call for the revenue generated by the company and its bottlers to double to roughly USD 200 billion by 2020, with profit margins increasing too.
Coke also said it hopes to more than double the number of soft drink servings it sells to more than 3 billion per day by the end of 2020.
CEO Muhtar Kent explained that the annual revenue growth rate implied by the 2020 goal is a little higher than the top end of Coke’s standard long-term growth target, but he sought to assure investors and analysts that it is "definitely achievable."
Mr Kent’s hopes rest on the purchasing powers of the emerging middle classes in developing countries.
For example, Chinese consumers drink an average of 8 servings of Coca-Cola per year, compared with 214 in the United States and 387 in Mexico.
In addition to its trademark brand, Coca-Cola has 12 other brands that currently generate over USD 1 billion in retail sales, including Sprite, Fanta, Dasani water, Powerade sports drink and Georgia coffee.
Moreover, Mr Kent hopes to continue acquiring entrepreneurial beverages brands once they reach a certain size that allows adding them to the Coke system easily.
By 2020, Coke forecasts it should have about 30 brands with sales of USD 1 billion.
Already, Coke derives more than three-quarters of its revenue from markets outside the United States. It expects to offset falling sales in the U.S. with strong growth in emerging markets like India, China and Brazil.
Industry-wide sales of carbonated soft drinks have been falling in the U.S. even before the current economic crisis.
Overall U.S. sales volume of carbonated soft drinks fell 3 percent in 2008 to 9.6 billion 192-ounce cases, the lowest since 1997. There was a 2.3 percent decline in 2007, it was reported.
Coke said strong brands, targeted marketing campaigns and new packages and price points would help drive growth.
The company does not provide specific earnings forecasts, but has repeatedly said its long-term growth targets call for annual sales volume to increase 3 percent to 4 percent, revenue to increase 5 percent to 6 percent and earnings per share to increase at a high single-digit percentage rate.
If the company and bottlers achieve the 2020 goals, they would generate cumulative cash flow of USD 130 billion to USD 150 billion and would reinvest USD 32 billion to USD 37 billion in capital expenditures. That would still leave Coke with some cash in hand for other things like dividends, acquisitions and share repurchases.
On 20 October 2009, The Coca-Cola Company reported that in its third quarter net income rose slightly to USD 1.90 billion from USD 1.89 billion a year earlier. Net operating revenue fell 4 percent to USD 8.04 billion. Sales by volume rose 2 percent.
In November 2009, Mr Kent announced that beverages in Coke’s new PlantBottle™ packaging were beginning to arrive in stores in select markets throughout the world, initiating the company’s journey toward a goal of producing 2 billion of the special PET plastic bottles by the end of 2010.
PlantBottle PET plastic bottles are made partially from plants, which reduces Coke’s dependence on a non-renewable resource – petroleum.
