Coca Cola 2015 Annual Report Download - page 10

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Sales of our nonalcoholic ready-to-drink beverages are somewhat seasonal, with the second and third calendar quarters accounting for the highest sales
volumes. The volume of sales in the beverage business may be affected by weather conditions.
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The nonalcoholic beverage segment of the commercial beverage industry is highly competitive, consisting of numerous companies ranging from small or
emerging to very large and well established. These include companies that, like our Company, compete in multiple geographic areas, as well as businesses
that are primarily regional or local in operation. Competitive products include numerous nonalcoholic sparkling beverages; various water products,
including packaged, flavored and enhanced waters; juices and nectars; fruit drinks and dilutables (including syrups and powdered drinks); coffees and teas;
energy and sports and other performance-enhancing drinks; filtered milk and other dairy-based drinks; functional beverages, including vitamin-based
products and relaxation beverages; and various other nonalcoholic beverages. These competitive beverages are sold to consumers in both ready-to-drink and
other than ready-to-drink form. In many of the countries in which we do business, including the United States, PepsiCo, Inc. ("PepsiCo"), is one of our primary
competitors. Other significant competitors include, but are not limited to, Nestlé, DPSG, Groupe Danone, Mondelēz International, Inc. ("Mondelēz"), Kraft
Foods Group, Inc. ("Kraft"), Suntory Beverage & Food Limited ("Suntory") and Unilever. In certain markets, our competition also includes beer companies.
We also compete against numerous regional and local companies and, in some markets, against retailers that have developed their own store or private label
beverage brands.
Competitive factors impacting our business include, but are not limited to, pricing, advertising, sales promotion programs, product innovation, increased
efficiency in production techniques, the introduction of new packaging, new vending and dispensing equipment, and brand and trademark development and
protection.
Our competitive strengths include leading brands with high levels of consumer acceptance; a worldwide network of bottlers and distributors of Company
products; sophisticated marketing capabilities; and a talented group of dedicated associates. Our competitive challenges include strong competition in all
geographic regions and, in many countries, a concentrated retail sector with powerful buyers able to freely choose among Company products, products of
competitive beverage suppliers and individual retailers' own store or private label beverage brands.
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Water is a main ingredient in substantially all of our products. While historically we have not experienced significant water supply difficulties, water is a
limited natural resource in many parts of the world, and our Company recognizes water availability, quality and sustainability, for both our operations and
also the communities where we operate, as one of the key challenges facing our business.
In addition to water, the principal raw materials used in our business are nutritive and non-nutritive sweeteners. In the United States, the principal nutritive
sweetener is high fructose corn syrup ("HFCS"), which is nutritionally equivalent to sugar. HFCS is available from numerous domestic sources and has
historically been subject to fluctuations in its market price. The principal nutritive sweetener used by our business outside the United States is sucrose, i.e.,
table sugar, which is also available from numerous sources and has historically been subject to fluctuations in its market price. Our Company generally has
not experienced any difficulties in obtaining its requirements for nutritive sweeteners. In the United States, we purchase HFCS to meet our and our bottlers'
requirements with the assistance of Coca-Cola Bottlers' Sales & Services Company LLC ("CCBSS"). CCBSS is a limited liability company that is owned by
authorized Coca-Cola bottlers doing business in the United States. Among other things, CCBSS provides procurement services to our Company for the
purchase of various goods and services in the United States, including HFCS.
The principal non-nutritive sweeteners we use in our business are aspartame, acesulfame potassium, saccharin, cyclamate, sucralose and a sweetener derived
from the stevia plant. Generally, these raw materials are readily available from numerous sources. However, our Company purchases aspartame, an important
non-nutritive sweetener that is used alone or in combination with other important non-nutritive sweeteners such as saccharin or acesulfame potassium in our
low- and no-calorie sparkling beverage products, primarily from Ajinomoto Co., Inc. and SinoSweet Co., Ltd., which we consider to be our primary sources
for the supply of this product. Our Company generally has not experienced difficulties in obtaining its requirements for non-nutritive sweeteners and we do
not anticipate such difficulties in the future. We work closely with Tate & Lyle PLC, our primary sucralose supplier, to maintain continuity of supply.
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