Coca Cola 2013 Annual Report Download - page 81

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 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. We own and market four of the world’s top five
nonalcoholic sparkling beverage brands: Coca-Cola, 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. Beverages bearing trademarks owned by or licensed to us account for 1.9 billion of the
approximately 57 billion beverage servings of all types consumed worldwide every day.
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 product business’’ or ‘‘finished
product operations’’).
Generally, finished product 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 — such
as cans and refillable and nonrefillable glass and plastic bottles — bearing our trademarks or trademarks licensed to us 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 authorized fountain wholesalers who in turn sell and distribute the fountain syrups to fountain
retailers.
Our finished product operations consist primarily of Company-owned or -controlled bottling, sales and distribution operations,
including Coca-Cola Refreshments (‘‘CCR’’). Our Company-owned or -controlled bottling, sales and distribution operations, other
than CCR, are included in our Bottling Investments operating segment. CCR is included in our North America operating
segment. Our finished product 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 partners who distribute them to retailers. In addition, in the United States, we
manufacture fountain syrups and sell them to fountain retailers, such as restaurants and convenience stores who use the fountain
syrups to produce beverages for immediate consumption, or to authorized fountain wholesalers or bottling partners who resell the
fountain syrups to fountain retailers. In the United States, we authorize wholesalers to resell our fountain syrups through
nonexclusive appointments that neither restrict us in setting the prices at which we sell fountain syrups to the wholesalers nor
restrict the territories in which the wholesalers may resell in the United States.
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