Coca Cola 2010 Annual Report Download - page 94

THE COCA-COLA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
The Coca-Cola Company is the world’s largest nonalcoholic beverage company. We own or license and market more
than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters,
enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks. Along with
Coca-Cola, which is recognized as the world’s most valuable brand, we own and market four of the world’s top five
nonalcoholic sparkling beverage brands, including Diet Coke, Fanta and Sprite. Finished beverage products bearing our
trademarks, sold in the United States since 1886, are now sold in more than 200 countries.
We make our branded beverage products available to consumers throughout the world through our network of
Company-owned or controlled bottling and distribution operations, bottling partners, distributors, wholesalers and
retailers — the world’s largest beverage distribution system. Of the approximately 55 billion beverage servings of all
types consumed worldwide every day, beverages bearing trademarks owned by or licensed to us account for
approximately 1.7 billion.
On October 2, 2010, we acquired the North American business of Coca-Cola Enterprises Inc. (‘‘CCE’’), one of our
major bottlers, consisting of CCE’s production, sales and distribution operations in the United States, Canada, the
British Virgin Islands, the United States Virgin Islands and the Cayman Islands, and a substantial majority of CCE’s
corporate segment. Upon completion of the CCE transaction, we combined the management of the acquired North
American business with the management of our existing foodservice business, Minute Maid and Odwalla juice
businesses, North America supply chain operations and Company-owned bottling operations in Philadelphia,
Pennsylvania, into a unified bottling and customer service organization called Coca-Cola Refreshments (‘‘CCR’’). In
addition, we reshaped our remaining Coca-Cola North America (‘‘CCNA’’) operations into an organization that
primarily provides franchise leadership and consumer marketing and innovation for the North American market.
Our Company markets, manufactures and sells:
• beverage concentrates, sometimes referred to as ‘‘beverage bases,’’ and syrups, including fountain syrups (we
refer to this part of our business as our ‘‘concentrate business’’ or ‘‘concentrate operations’’); and
• finished sparkling and still beverages (we refer to this part of our business as our ‘‘finished products business’’ or
‘‘finished products operations’’).
Generally, finished products operations generate higher net operating revenues but lower gross profit margins than
concentrate operations.
In our concentrate operations, we typically generate net operating revenues by selling concentrates and syrups to
authorized bottling and canning operations (to which we typically refer as our ‘‘bottlers’’ or our ‘‘bottling partners’’).
Our bottling partners either combine the concentrates with sweeteners (depending on the product), still water and/or
sparkling water or combine the syrups with sparkling water to produce finished beverages. The finished beverages are
packaged in authorized containers bearing our trademarks or trademarks licensed to us — such as cans and refillable
and nonrefillable glass and plastic bottles — and are then sold to retailers directly or, in some cases, through
wholesalers or other bottlers. Outside the United States, we also sell concentrates for fountain beverages to our bottling
partners who are typically authorized to manufacture fountain syrups, which they sell to fountain retailers such as
restaurants and convenience stores which use the fountain syrups to produce beverages for immediate consumption, or
to fountain wholesalers who in turn sell and distribute the fountain syrups to fountain retailers.
Our finished products operations consist primarily of the production, sales and distribution operations managed by CCR
and our Company-owned or controlled bottling and distribution operations. CCR is included in our North America
operating segment, and our Company-owned or controlled bottling and distribution operations are included in our
Bottling Investments operating segment. Our finished products operations generate net operating revenues by selling
sparkling beverages and a variety of still beverages, such as juices and juice drinks, energy and sports drinks,
ready-to-drink teas and coffees, and certain water products, to retailers or to distributors, wholesalers and bottling
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