Recently, the largest global producer and marketer of
beverages,
The Coca-Cola Company
(
KO
) declared a grant of more than $2 million, a part of which would
be used for supporting community health and fitness programs in
North America. The company's philanthropic segment, The Coca-Cola
Foundation will award the grant.
Given the rise in lifestyle diseases, people are now concerned
about the nutritional value of packaged food. As a result, most
of the companies are now focusing on increasing the health
quotient of their brands. The stress is on producing food
products with simple natural ingredients, minimum preservatives
and optimum processing.
Therefore, in order to ensure that its products continue to enjoy
growing demand, The Coca-Cola Company is investing in creating a
culture of healthy lifestyle in communities. With increase in
physical activities and awareness of healthy food choices among
consumers, the company wants to ensure that its products are not
blamed for lifestyle diseases and the consumers continue to
include these products in their regular life.
Though The Coca-Cola Company, a peer of
Dr Pepper Snapple Group
(
DPS
), is still largely dependent on its carbonated beverages, the
company is slowly expanding its portfolio of non-carbonated
drinks. As such, Coca-Cola commands a leading position in the
juices or still beverages category with its flagship brands such
as Minute Maid, Simply and POWERade.
Recently, The Coca-Cola Company and dairy cooperative Select Milk
Producers, Inc announced their decision to purchase equity stakes
in Fair Oaks Farms Brands, LLC, a company that produces and
markets value added nutrition products, including Core Power, a
popular high protein milk shake. Together, the companies intend
to create a new portfolio of healthy beverages with high growth
potential.
We are positive about Coca-Cola's global reach, strong brand
power, expanding presence outside the U.S. and its solid cash
position. Though the expected moderation in commodity cost
inflation is a relief, soft economic conditions and a tough
currency environment going ahead concerns us.
Currently, we have a Neutral recommendation on The Coca-Cola
Company over the long term. The Coca-Cola Company carries a Zacks
#4 Rank in the near term (Sell rating).
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