Coke is king, but what are its future plans? Coca-Cola held its annual shareholders meeting this week. Muhtar Kent, the company's CEO and Chairman, announced 2 huge strategies to drive global growth and connect with young consumers.
The company's revenues peaked during the fiscal 2012 year, at $48 billion. For the past two years, revenues have remained at around $46 billion. Meanwhile, annual net income dropped from around $9 billion to $7 billion.
Coca-Cola is facing some major generational challenges. Consumers are seeking natural ingredients in beverages and foods, and healthier options over traditional drinks such as sodas, according to Seeking Alpha.
Coca-Cola has started to make some business tweaks, but as usual the risk of quickening or slowing success exists. The company has two primary strategies to drive national and international sales.
Coca-Cola's first strategy is to make business changes based on the development of a market. For example, Kent said that India and Africa are emerging markets that provide great potential.
Coke's CEO explained that in such markets, "volume" is the key. Meanwhile, in development markets both volume and pricing are important.
However, in developed markets, price/mix forms the best "growth lever." While North America's operating revenue was almost 50 percent of the fiscal 2014's total, operating income dropped to around 25 percent.
The second strategy is to boost focused "marketing and distribution." For example, social media can help Coca-Cola to communicate with young generations that consume coffee, tea, and energy drinks.
Coca-Cola's main rival PepsiCo also has a snack foods sector as a safety valve. However, Coca-Cola has interestingly invested in two non-soda beverages: Monster energy drinks and Keurig K-cup coffee.
This year Coke will focus greatly on celebrating the 100th anniversary of the iconic "Coke bottle." The company has recently unveiled its low-sugar Coke Life. It will also try to connect with health-conscious consumers with mini-sized cans, according to Wall Street Journal.
During the past year Coca-Cola's stocks have dropped 1.1 percent. However, it still offers an impressive 3.25 percent yield.