Coca Cola 2007 Annual Report Download - page 46

Company and Honest Tea, Inc. completed an agreement resulting in the Company holding an approximate 40 percent
interest in Honest Tea, Inc., the maker of organic beverages, including beverages sold under the Honest Tea trademark.
Refer to Note 22 of Notes to Consolidated Financial Statements.
Unit case volume in the Pacific increased 7 percent in 2007 compared to 2006. The increase includes 18 percent
growth in China, 5 percent growth in the Philippines, and 3 percent growth in Japan. The increase in unit case volume
in China was led by double-digit growth in sparkling beverages, Minute Maid and Nestea. The increase in unit case
volume in Japan was primarily due to growth in Trademarks Coca-Cola, Sprite, Sokenbicha and water brands. Georgia
Coffee volume declined 1 percent in 2007 compared to 2006; however, as a result of success with a new marketing
campaign, it returned to growth in the fourth quarter of 2007. The increase in unit case volume in the Philippines was
primarily due to strong sparkling unit case volume growth reflecting the investment in key marketing initiatives, the
focus on improving the route-to-market, and reshaping and streamlining the supply chain and building sales
capabilities. On February 22, 2007, the Company acquired the remaining 65 percent ownership interest in Coca-Cola
Bottlers Philippines, Inc. (“CCBPI”) held by San Miguel Corporation and two of its subsidiaries (collectively, “SMC”)
and began to implement certain initiatives to address business performance. Refer to Note 20 of Notes to Consolidated
Financial Statements.
Unit case volume for Bottling Investments increased 64 percent in 2007 versus 2006, primarily due to acquisitions
of certain bottlers and unit case volume growth across the bottling group. Refer to Note 20 of Notes to Consolidated
Financial Statements.
In Africa, unit case volume increased 4 percent in 2006 compared to 2005, reflecting growth across the majority
of divisions, which was partially offset by a slight decline in Nigeria primarily related to affordability issues and
competitive and economic pressures. The unit case volume increase in Africa was also partially offset by an
industrywide temporary shortage in the supply of carbon dioxide in South Africa in the fourth quarter of 2006.
In Eurasia, unit case volume grew 14 percent in 2006 compared to 2005, led by double-digit growth in Russia and
Turkey, partially offset by a 5 percent decline in India. The unit case volume growth in Russia and Turkey was the
result of improving macroeconomic trends, strong bottler execution and successful marketing programs. Unit case
volume in Russia also benefited from the full-year impact of the joint acquisition of Multon, a Russian juice business,
compared to a partial year in 2005. The Company and Coca-Cola Hellenic jointly acquired Multon in April 2005. The
decline in India was primarily due to price increases in the second half of 2005 and steps taken to drive revenue growth
and improve operating and working capital efficiency. The results in India reflected high single-digit declines in
sparkling beverages which were partially offset by growth in still beverages. Continued investment in marketing
initiatives around the quality and safety of our products and focus on execution in the consolidated bottling operations
delivered positive results during the second half of 2006, despite the renewed unfounded allegations of unsafe pesticide
levels in the Company’s products.
Unit case volume in the European Union increased 6 percent in 2006 compared to 2005, primarily due to solid
growth across all divisions driven by successful marketing campaigns, launches of Coca-Cola Zero in nine countries
and favorable weather in the second half of 2006. In addition, the acquisition of Apollinaris, and the joint acquisition of
Fonti del Vulture, also known as Traficante, an Italian mineral water company, with Coca-Cola Hellenic during 2006
contributed approximately 2 percentage points of unit case volume growth in 2006. Unit case volume in Germany
increased 5 percent in 2006 versus 2005, and reflected strong growth of Trademark Coca-Cola in 2006 compared to
2005. The results were driven by improved marketplace execution capabilities, the launch of Coca-Cola Zero in
July 2006, increased availability in the discounter channel and generally favorable weather. The acquisition of
Apollinaris also contributed to unit case volume growth in Germany. Unit case volume in Northwest Europe increased
3 percent in 2006 versus 2005 as performance stabilized. The results reflected 3 percent unit case volume growth in
sparkling beverages, led by growth of Trademark Coca-Cola, and solid growth in still beverages. In addition, the
successful launch of Coca-Cola Zero in Great Britain at the end of June 2006 and generally favorable weather during
the second half of the year contributed to the performance. Unit case volume in Iberia increased 6 percent in 2006
versus 2005, led by strong growth in Spain.
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