Organic growth leading the way for Coca-cola

Source: Food and Drink Digital

Date :2/25/2008 11:18:18 AM

Coca-cola, the worlds largest soft drink maker, has said that it will increase its annual sales volume by three percent to four percent, without the need for M&A.

At a time when carbonated soft drinks such as Diet Coke and Sprite are experiencing declines in U.S. sales, the company has profited from the recent acquisitions of Glaceau vitamin water and FUZE teas.

However during the company’s recent presentation conference in Florida, hosted by New York’s Consumer Analyst Group, Coke Chief Financial Officer Gary Fayard clarified the company’s plans to continue making acquisitions, but insisted this wasn’t necessary for long-term growth.

"We will continue to do bolt-on acquisitions but they are not included in the growth model," Mr. Fayard said.

Goals

Further targets included increasing operating income by six percent to eight percent, revenue by five percent to six percent, and earnings-per-share by an elevated single-digit percentage rate.

“We can never replace organic growth with acquisitions. Organic growth is the oxygen of our business," said Soon-to-be Chief Executive Officer Muhtar Kent.

Coca-cola, Mr. Kent said, was looking at more important brands in a disciplined manner for the future.

“We're not focused on big bets that are going to be big and important."

Coke shares were down 24 cents to $57.75 on the New York Stock Exchange in afternoon trading.

February 25, 2007