Coca Cola 2008 Annual Report Download - page 38

beverages with our bottling partners. We will continue to build a supply chain network that leverages the size
and scale of the Coca-Cola system to gain a competitive advantage.
Challenges and Risks
Being a global company provides unique opportunities for our Company. Challenges and risks accompany
those opportunities.
Our management has identified certain challenges and risks that demand the attention of the nonalcoholic
beverages segment of the commercial beverages industry and our Company. Of these, four key challenges and
risks are discussed below.
Obesity and Inactive Lifestyles. Increasing concern among consumers, public health professionals and
government agencies of the potential health problems associated with obesity and inactive lifestyles represents a
significant challenge to our industry. We recognize that obesity is a complex public health problem. Our
commitment to consumers begins with our broad product line, which includes a wide selection of diet and light
beverages, juices and juice drinks, sports drinks and water products. Our commitment also includes adhering to
responsible policies in schools and in the marketplace; supporting programs to encourage physical activity and
promote nutrition education; and continuously meeting changing consumer needs through beverage innovation,
choice and variety. We are committed to playing an appropriate role in helping address this issue in cooperation
with governments, educators and consumers through science-based solutions and programs.
Water Quality and Quantity. Water quality and quantity is an issue that increasingly requires our
Company’s attention and collaboration with the nonalcoholic beverages segment of the commercial beverages
industry, governments, nongovernmental organizations and communities where we operate. Water is the main
ingredient in substantially all of our products. It is also a limited natural resource facing unprecedented
challenges from overexploitation, increasing pollution and poor management. Our Company is in an excellent
position to share the water-related knowledge we have developed in the communities we serve—water-resource
management, water treatment, wastewater treatment systems, and models for working with communities and
partners in addressing water and sanitation needs. We are actively engaged in assessing the specific water-related
risks that we and many of our bottling partners face and have implemented a formal water risk management
program. We are working with our global partners to develop water sustainability projects. We are actively
encouraging improved water efficiency and conservation efforts throughout our system. As demand for water
continues to increase around the world, we expect commitment and continued action on our part will be crucial
in the successful long-term stewardship of this critical natural resource.
Evolving Consumer Preferences. Consumers want more choices. We are impacted by shifting consumer
demographics and needs, on-the-go lifestyles, aging populations in developed markets and consumers who are
empowered with more information than ever. We are committed to generating new avenues for growth through
our core brands with a focus on diet and light products. We are also committed to continuing to expand the
variety of choices we provide to consumers to meet their needs, desires and lifestyle choices.
Increased Competition and Capabilities in the Marketplace. Our Company is facing strong competition from
some well-established global companies and many local participants. We must continue to selectively expand
into other profitable segments of the nonalcoholic beverages segment of the commercial beverages industry and
strengthen our capabilities in marketing and innovation in order to maintain our brand loyalty and market share.
All four of these challenges and risks—obesity and inactive lifestyles, water quality and quantity, evolving
consumer preferences, and increased competition and capabilities in the marketplace—have the potential to
have a material adverse effect on the nonalcoholic beverages segment of the commercial beverages industry and
on our Company; however, we believe our Company is well positioned to appropriately address these challenges
and risks.
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