Coca Cola 2015 Annual Report Download - page 13


In addition to the other information set forth in this report, you should carefully consider the following factors, which could materially affect our business,
financial condition or results of operations in future periods. The risks described below are not the only risks facing our Company. Additional risks not
currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of
operations in future periods.
Obesity concerns may reduce demand for some of our products.
There is growing concern among consumers, public health professionals and government agencies about the health problems associated with obesity. In
addition, some researchers, health advocates and dietary guidelines are suggesting that consumption of sugar-sweetened beverages, including those
sweetened with HFCS or other nutritive sweeteners, is a primary cause of increased obesity rates and are encouraging consumers to reduce or eliminate
consumption of such products. Increasing public concern about obesity; possible new or increased taxes on sugar-sweetened beverages by government
entities to reduce consumption or to raise revenue; additional governmental regulations concerning the marketing, labeling, packaging or sale of our sugar-
sweetened beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the
marketing, labeling or sale of sugar-sweetened beverages may reduce demand for or increase the cost of our sugar-sweetened beverages, which could
adversely affect our profitability.
Water scarcity and poor quality could negatively impact the Coca-Cola system's costs and capacity.
Water is a main ingredient in substantially all of our products, is vital to the production of the agricultural ingredients on which our business relies and is
needed in our manufacturing process. It also is critical to the prosperity of the communities we serve. Water is a limited resource in many parts of the world,
facing unprecedented challenges from overexploitation, increasing demand for food and other consumer and industrial products whose manufacturing
processes require water, increasing pollution, poor management and the effects of climate change. As the demand for water continues to increase around the
world, and as water becomes scarcer and the quality of available water deteriorates, the Coca-Cola system may incur higher costs or face capacity constraints
that could adversely affect our profitability or net operating revenues in the long run.
If we do not anticipate and address evolving consumer preferences, our business could suffer.
Consumer preferences are evolving rapidly as a result of, among other things, health and nutrition considerations, especially the perceived undesirability of
artificial ingredients and obesity concerns; shifting consumer demographics, including aging populations; changes in consumer tastes and needs; changes in
consumer lifestyles; and competitive product and pricing pressures. If we do not successfully anticipate these changing consumer preferences or fail to
address them by timely developing new products or product extensions through innovation, our share of sales, volume growth and overall financial results
could be negatively affected.
Increased competition and capabilities in the marketplace could hurt our business.
The nonalcoholic beverage segment of the commercial beverage industry is highly competitive. We compete with major international beverage companies
that, like our Company, operate in multiple geographic areas, as well as numerous companies that are primarily regional or local in operation. In many
countries in which we do business, including the United States, PepsiCo is a primary competitor. Other significant competitors include, but are not limited to,
Nestlé, DPSG, Groupe Danone, Mondelēz, Kraft, Suntory and Unilever. In certain markets, our competition also includes major beer companies. Our beverage
products also compete against private label brands developed by retailers, some of which are Coca-Cola system customers. Our ability to gain or maintain
share of sales in the global market or in various local markets may be limited as a result of actions by competitors. If we do not continue to strengthen our
capabilities in marketing and innovation to maintain our brand loyalty and market share while we selectively expand into other product categories in the
nonalcoholic beverage segment of the commercial beverage industry, our business could be negatively affected.
Product safety and quality concerns could negatively affect our business.
Our success depends in large part on our ability to maintain consumer confidence in the safety and quality of all of our products. We have rigorous product
safety and quality standards which we expect our operations as well as our bottling partners to meet. However, we cannot assure you that despite our strong
commitment to product safety and quality we or all of our bottling partners will always meet these standards, particularly as we expand our product offerings
through innovation or acquisitions of products, such as value-added dairy products, that are beyond our traditional range of beverage products. If we or our
bottling partners fail to comply with applicable product safety and quality standards and beverage products taken to the market are or become contaminated
or adulterated, we may be required to conduct costly product recalls and may become subject to product liability claims and negative publicity, which could
cause our business to suffer.
11