Coca Cola 2004 Annual Report Download - page 6

Georgia brand ready-to-drink coffees) and numerous other brands. In many countries (excluding the United
States, among others), our Company’s beverage products also include Schweppes, Canada Dry, Dr Pepper and
Crush. Our Company produces, distributes and markets juice and juice-drink products including Minute Maid
juices and juice drinks, Simply Orange orange juice, Odwalla super premium juices and drinks, Five Alive
refreshment beverages, Bacardi tropical fruit mixers (manufactured and marketed under a license from
Bacardi & Company Limited) and Hi-C ready-to-serve fruit drinks. Beverage Partners Worldwide, the
Company’s 50 percent-owned joint venture with Nestl´ e S.A., markets ready-to-drink teas and coffees in certain
countries. Our Company is the exclusive master distributor of Evian bottled water in the United States and
Canada. In addition, CCDA Waters, L.L.C. (‘‘CCDA’’), a 51 percent-owned consolidated subsidiary,
manufactures and markets Dannon, Sparkletts and other water brands in the United States under a license from
Group Danone.
Consumer demand determines the optimal menu of Company product offerings. Consumer demand can
vary from one locale to another and can change over time within a single locale. Employing our business
strategy, and with special focus on core brands, our Company seeks to build its existing brands and, at the same
time, to broaden its historical family of brands, products and services in order to create and satisfy consumer
demand locale by locale.
Our Company introduced a variety of new brands, brand extensions and products in 2004. Among
numerous examples, we introduced Diet Coke with Lime in Australia, New Zealand and North America and
Coca-Cola C2 in Japan and North America. In China, we launched Sprite Icy Mint. In Germany, we launched
Fanta Citrell, the first mid-calorie soft drink available throughout that country. In Finland and Sweden, we
repositioned Fanta Light as Fanta Free. In Mexico, we launched Fanta Naranja Chamoy, a unique beverage
featuring the taste of a popular Mexican sweet chili. And in New Zealand, we introduced Aqua Shot, a new
active water with a refreshing shot of fruit flavor and a boost of essential vitamins. In addition, we extended the
rebranding of Diet Sprite to Diet Sprite Zero/Sprite Zero, which began in Greece in 2002, to now include a total
of 23 countries, including the United States.
During 2004, we acquired ownership or license rights for a number of brands, including the Bistra brand in
Croatia, the Cepita brand in Argentina, the Joya brand in Mexico and the Nada brand in Bahrain.
Our Company measures sales volume in two ways: (1) gallons and (2) unit cases of finished products.
‘‘Gallons’’ is a unit of measurement for concentrates (sometimes referred to as beverage bases), syrups, finished
beverages and powders (in all cases, expressed in equivalent gallons of syrup) for all beverage products which are
reportable as unit case volume. Most of our revenues are based on this measure of primarily ‘‘wholesale’’
activity. We also measure volume in unit cases. As used in this report, ‘‘unit case’’ means a unit of measurement
equal to 192 U.S. fluid ounces of finished beverage (24 eight-ounce servings); and ‘‘unit case volume’’ of the
Company means the number of unit cases (or unit case equivalents) of Company trademark or licensed beverage
products directly or indirectly sold by the Coca-Cola bottling system or by the Company to customers. Unit case
volume primarily consists of beverage products bearing Company trademarks. Also included in unit case volume
are certain products licensed to our Company, or brands owned by Coca-Cola system bottlers for which our
Company provides marketing support and from which it derives income from the sales. Such products licensed
to our Company or owned by Coca-Cola system bottlers account for a minimal portion of total unit case volume.
Although most of our Company’s revenues are not based directly on unit case volume, we believe unit case
volume is one of the measures of the underlying strength of the Coca-Cola system because it measures trends at
the consumer level. The unit case volume numbers used in this report are based on estimates received by the
Company from its bottling partners and distributors. Gallon sales and unit case volume are not necessarily equal
during any given period. Items such as seasonality, bottlers’ inventory practices, supply point changes, timing of
price increases and new product introductions can create differences between gallon sales and unit case volume.
In 2004, concentrates and syrups for beverages bearing the trademark ‘‘Coca-Cola’’ or including the
trademark ‘‘Coke’’ accounted for approximately 56 percent of the Company’s total gallon sales.
4