Coca Cola 2008 Annual Report Download - page 7

In 2008, concentrates and syrups for beverages bearing the trademark ‘‘Coca-Cola’’ or any trademark that
includes ‘‘Coca-Cola’’ or ‘‘Coke’’ (‘‘Coca-Cola Trademark Beverages’’) accounted for approximately 52 percent
of the Company’s total concentrate sales.
In 2008, concentrate sales in the United States (‘‘U.S. concentrate sales’’) represented approximately
23 percent of the Company’s worldwide concentrate sales. Approximately 56 percent of U.S. concentrate sales
for 2008 was attributable to sales of beverage concentrates and syrups to 74 authorized bottler ownership groups
in 393 licensed territories. Those bottlers prepare and sell Company Trademark Beverages for the food store and
vending machine distribution channels and for other distribution channels supplying products for home and
immediate consumption. Approximately 32 percent of 2008 U.S. concentrate sales was attributable to fountain
syrups sold to fountain retailers and to 470 authorized fountain wholesalers, some of which are authorized
bottlers. The remaining approximately 12 percent of 2008 U.S. concentrate sales was attributable to sales by the
Company of finished beverages, including juice and juice-drink products and certain water products. Coca-Cola
Enterprises Inc., including its bottling subsidiaries and divisions (‘‘CCE’’), accounted for approximately
42 percent of the Company’s U.S. concentrate sales in 2008. At December 31, 2008, our Company held an
ownership interest of approximately 35 percent in CCE, which is the world’s largest bottler of Company
Trademark Beverages.
In 2008, concentrate sales outside the United States represented approximately 77 percent of the
Company’s worldwide concentrate sales. The countries outside the United States in which our concentrate sales
were the largest in 2008 were Mexico, Brazil, China and Japan, which together accounted for approximately
29 percent of our worldwide concentrate sales. Approximately 89 percent of non-U.S. unit case volume for 2008
was attributable to sales of beverage concentrates and syrups to authorized bottlers together with sales by the
Company of finished beverages, other than juice and juice-drink products, in 442 licensed territories.
Approximately 5 percent of 2008 non-U.S. unit case volume was attributable to fountain syrups. The remaining
approximately 6 percent of 2008 non-U.S. unit case volume was attributable to juice and juice-drink products.
In addition to conducting our own independent advertising and marketing activities, we may provide
promotional and marketing services or funds to our bottlers. In most cases, we do this on a discretionary basis
under the terms of commitment letters or agreements, even though we are not obligated to do so under the
terms of the bottling or distribution agreements between our Company and the bottlers. Also, on a discretionary
basis in most cases, our Company may develop and introduce new products, packages and equipment to assist its
bottlers. Likewise, in many instances, we provide promotional and marketing services and/or funds and/or
dispensing equipment and repair services to fountain and bottle/can retailers, typically pursuant to marketing
agreements. The aggregate amount of funds provided by our Company to bottlers, resellers or other customers
of our Company’s products, principally for participation in promotional and marketing programs, was
approximately $4.4 billion in 2008.
Bottler’s Agreements and Distribution Agreements
Most of our products are manufactured and sold by our bottling partners. We typically sell concentrates and
syrups to our bottling partners, who convert them into finished packaged products which they sell to distributors
and other customers. Separate contracts (‘‘Bottler’s Agreements’’) exist between our Company and each of our
bottling partners regarding the manufacture and sale of Company products. Subject to specified terms and
conditions and certain variations, the Bottler’s Agreements generally authorize the bottlers to prepare specified
Company Trademark Beverages, to package the same in authorized containers, and to distribute and sell the
same in (but, subject to applicable local law, generally only in) an identified territory. The bottler is obligated to
purchase its entire requirement of concentrates or syrups for the designated Company Trademark Beverages
from the Company or Company-authorized suppliers. We typically agree to refrain from selling or distributing,
or from authorizing third parties to sell or distribute, the designated Company Trademark Beverages throughout
the identified territory in the particular authorized containers; however, we typically reserve for ourselves or our
designee the right (1) to prepare and package such beverages in such containers in the territory for sale outside
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