Coca Cola 2010 Annual Report Download - page 40

Bottling and Distribution Operations
While most of our Company beverage products are manufactured, sold and distributed by independently owned and
managed bottling partners, the Company has had a significant increase in the number of consolidated bottling and
distribution operations over the last several years. We often acquire bottlers in underperforming markets where we
believe we can use our resources and expertise to improve performance. Owning such a controlling interest enables us
to compensate for limited local resources; help focus the bottler’s sales and marketing programs; assist in the
development of the bottler’s business and information systems; and establish an appropriate capital structure for the
bottler.
As a Company we have a long history of providing world-class customer service, demonstrating leadership in the
marketplace and leveraging the talent of our global workforce. In addition, we have an experienced bottler management
team. All of these factors are critical to build upon as we manage our growing bottling and distribution operations.
The Company has a deep commitment to continuously improving our business. This includes our efforts to develop
innovative packaging and merchandising solutions which help drive demand for our beverages and meet the growing
needs of our consumers. As we further transform the way we go to market the Company continues to seek out ways to
be more efficient.
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.
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