Saturday, May 3, 2014

Coca-Cola Might Struggle Amid Growth Concerns In Key Markets

This article was originally published by GuruFocus on April 28, 2014. 

 By Sarfaraz A. Khan. Research assistant: Gohar Yousuf

The decline in the consumption of carbonated drinks has stalled the growth of the biggest player in the industry, The Coca Cola Company (KO).

A report by Beverage Digest has shown that the future might be even more difficult due to the accelerated decline in the consumption of carbonated drinks. Last year, the sales volume of carbonated drinks in the U.S. fell 3%, as opposed to a drop of 1.2% in the prior year.

Earlier this month, Coca-Cola released its quarterly results in which its earnings came in-line with market’s expectations. The company witnessed growth in some international markets for its soda drinks, but that was not enough to offset the declines coming from North America, Europe and Latin America. Overall, Coca-Cola reported a 1% decline in global soda volumes.

The company could grow in Brazil in the coming years on the back of two major sporting events. Coca-Cola will, however, struggle in Mexico after the price hike coming from the soda tax. Since Mexico is one of its biggest markets, a drop in volumes in this country can create problems for the company’s growth.

The company’s shares have fallen by .. read full article on GuruFocus.