Coca Cola 2003 Annual Report Download - page 28

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Our Company and the beverage industry are in an excellent position to share the water expertise we have
developed in the communities we serve—in resource management, wastewater treatment, rainwater harvesting
and even desalination. As demand for water continues to increase around the world, we expect cooperation will
be critical.
Free Trade. We believe the benefits of free trade—comparative advantage, price competition, labor mobility
and ultimately prosperity and economic growth over the long term—are clear. However, the breakdown of trade
talks, public pressure against trade organizations and the selective increase in tariffs around the world
demonstrate the challenges related to free trade. It is important for our Company in particular and the beverage
industry in general to show leadership in communicating the benefits of free trade.
All three of these challenges and risks—obesity, water and free trade—have the potential to adversely affect
our industry. We expect to work at the industry level to address these matters, and we believe our Company is
well positioned to have a positive impact related to these challenges and risks.
In addition to the three key challenges and risks impacting our industry as discussed above, we have
identified other challenges and risks that could impact the Company’s future financial results including
the following:
• maintenance of brand image and product quality;
• profitable expansion and growth of our family of brands in the competitive marketplace. Refer to MD&A
heading ‘‘Profitable Growth.’’
• restrictions on imports and exports and sources of supply; duties or tariffs; and changes in governmental
regulations;
• the imposition of additional restrictions on currency conversion and remittances abroad; and
• policy concerns particular to the United States with respect to a country in which the Company has
operations.
We believe many opportunities accompany these challenges and risks. Among these opportunities, we believe
the following opportunities exist for our Company.
• growth potential for all nonalcoholic beverage categories—carbonated soft drinks, waters, juices and
juice drinks, teas, coffees and sports drinks;
• new product introductions, intended to contribute to higher gross profits;
• premium packages, intended to generate strong revenue growth;
• significant package, pricing and channel opportunities to maximize profitable growth, especially in North
America, Japan and other key markets; and
• proper positioning to capture industry growth—we believe more than 80 percent of worldwide
incremental industry growth through 2007 will be from locations outside the United States.
Looking back at 2003, we identified several events noted below that negatively impacted our Company.
These events impacted seven countries directly (and other countries indirectly) on five continents, highlighting
the risks of operating globally. Despite these 2003 challenges and risks, our Company posted net operating
revenues and net income growth. Processes that allow us to anticipate crises (where possible) and respond
quickly to challenges and risks are critical to our success.
• production shutdown of the Company’s products in Venezuela for approximately one-half of the first
quarter of 2003 due to a national general strike and political turmoil;
• disruption caused by the implementation of a German deposit law on nonreturnable packages;
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