Coca Cola 2008 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2008 Coca Cola annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 168

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168

Competitive factors impacting our business include, but are not limited to, pricing, advertising, sales
promotion programs, product innovation, increased efficiency in production techniques, the introduction of new
packaging, new vending and dispensing equipment, and brand and trademark development and protection.
Our competitive strengths include leading brands with a high level of consumer acceptance; a worldwide
network of bottlers and distributors of Company products; sophisticated marketing capabilities; and a talented
group of dedicated associates. Our competitive challenges include strong competition in all geographic regions
and, in many countries, a concentrated retail sector with powerful buyers able to freely choose among Company
products, products of competitive beverage suppliers and individual retailers’ own store-brand beverages.
Raw Materials
The principal raw materials used by our business are nutritive and non-nutritive sweeteners. In the United
States, the principal nutritive sweetener is high fructose corn syrup, a form of sugar, which is available from
numerous domestic sources and is historically subject to fluctuations in its market price. The principal nutritive
sweetener used by our business outside the United States is sucrose, another form of sugar, which is also
available from numerous sources and is historically subject to fluctuations in its market price. Our Company
generally has not experienced any difficulties in obtaining its requirements for nutritive sweeteners. In the
United States, we purchase high fructose corn syrup to meet our and our bottlers’ requirements with the
assistance of Coca-Cola Bottlers’ Sales & Services Company LLC (‘‘CCBSS’’). CCBSS is a limited liability
company that is owned by authorized Coca-Cola bottlers doing business in the United States. Among other
things, CCBSS provides procurement services to our Company for the purchase of various goods and services in
the United States, including high fructose corn syrup.
The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium,
saccharin, cyclamate and sucralose. Generally, these raw materials are readily available from numerous sources.
However, our Company purchases aspartame, an important non-nutritive sweetener that is used alone or in
combination with other important non-nutritive sweeteners such as saccharin or acesulfame potassium in our
low-calorie sparkling beverage products, primarily from The NutraSweet Company and Ajinomoto Co., Inc.,
which we consider to be our primary sources for the supply of this product. We currently purchase acesulfame
potassium from Nutrinova Nutrition Specialties & Food Ingredients GmbH, which we consider to be our
primary source for the supply of this product. Our Company generally has not experienced any difficulties in
obtaining its requirements for non-nutritive sweeteners.
Our Company sells a number of products sweetened with sucralose, a non-nutritive sweetener. We work
closely with Tate & Lyle, our sucralose supplier, to maintain continuity of supply. Although Tate & Lyle is our
single source for sucralose, we do not anticipate difficulties in obtaining our requirements for sucralose.
With regard to juice and juice-drink products, citrus fruit, particularly orange juice concentrate, is our
principal raw material. The citrus industry is subject to the variability of weather conditions. In particular,
freezing weather or hurricanes in central Florida may result in shortages and higher prices for orange juice
concentrate throughout the industry. Due to our ability to also source orange juice concentrate from the
Southern Hemisphere (particularly from Brazil), we normally have an adequate supply of orange juice
concentrate that meets our Company’s standards.
Patents, Copyrights, Trade Secrets and Trademarks
Our Company owns numerous patents, copyrights and trade secrets, as well as substantial know-how and
technology, which we collectively refer to in this report as ‘‘technology.’’ This technology generally relates to our
Company’s products and the processes for their production; the packages used for our products; the design and
operation of various processes and equipment used in our business; and certain quality assurance software.
Some of the technology is licensed to suppliers and other parties. Our sparkling beverage and other beverage
formulae are among the important trade secrets of our Company.
10