SWOT analysis of Coca Cola 2018

Ovidijus Jurevicius | March 15, 2018

This is The Coca Cola Company SWOT analysis 2018. For more information on how to do a SWOT analysis please refer to our article.

Company Background

Key Facts
Name The Coca-Cola Company
Founded May 8, 1886
Industries served Beverage
Geographic areas served Worldwide (more than 200 countries)
Headquarters Atlanta, Georgia, United States
Current CEO James Quincey
Revenue (US$) 35.410 billion (2017) 15.4% decrease over 41.863 billion (2016)
Profit (US$) 1.182 billion (2017) 81.9% decrease over 6.527 billion (2016)
Employees 61,800 (2018)
Main Competitors PepsiCo Inc., Dr Pepper Snapple Group, Inc., Unilever Group, Mondēlez International, Inc., Groupe Danone, Kraft Foods Inc., Nestlé S.A. and many other companies in the beverage industry.

The Coca-Cola Company business overview from the company’s financial report:

"The Coca-Cola Company is the world’s largest beverage company. We own or license and market more than 500 nonalcoholic beverage brands, primarily sparkling beverages but also a variety of still beverages such as waters, enhanced waters, juices and juice drinks, ready-to-drink teas and coffees, and energy and sports drinks.

We own and market four of the world’s top five nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Fanta and Sprite. Finished beverage products bearing our trademarks, sold in the United States since 1886, are now sold in more than 200 countries.

We make our branded beverage products available to consumers throughout the world through our network of Company-owned or -controlled bottling and distribution operations as well as independent bottling partners, distributors, wholesalers and retailers — the world’s largest beverage distribution system.

Beverages bearing trademarks owned by or licensed to us account for 1.9 billion of the approximately 60 billion beverage servings of all types consumed worldwide every day.

We believe our success depends on our ability to connect with consumers by providing them with a wide variety of choices to meet their desires, needs and lifestyle choices. Our success further depends on the ability of our people to execute effectively, every day.

Our goal is to use our Company’s assets — our brands, financial strength, unrivaled distribution system, global reach, and the talent and strong commitment of our management and associates — to become more competitive and to accelerate growth in a manner that creates value for our shareowners.”[1]

You can find more information about the business in The Coca Cola Company's official website or Wikipedia’s article.

Coca Cola SWOT analysis


1. Diversified product portfolio with 21 billion-dollar brand

The Coca-Cola Company owns and distributes over 500 different brands, which is the most extensive beverage brand portfolio in the whole industry. The company offers beverages for every taste in 7 beverage categories:

  • Carbonated Soft Drinks
  • Bottled Water
  • Juice & Juice Drinks
  • Sports Drinks
  • Tea & Coffee
  • Energy Drinks & Shots
  • Alternative Drinks

Figure 1. Largest beverage brand portfolios

The Coca-Cola Company's and its rivals beverage rband portfolios. Coca-Cola owns 648 brands, PepsiCo owns 56 brands, Dr Pepple Snapple Group owns 62 brands and Nestle owns 10 brands.

Source: Companies’ financial reports and official websites[3][4][5][6]

The most popular company’s drink is Coca-Cola. Coca-Cola trademark (includes Diet Coke and Coca-Cola Zero) earned around 40% of the company’s total revenue.[1] While Coca-Cola is the most important product, it is only one of the 21 billion-dollar brands that the business owns. The company’s billion-dollar brands include:

The company also owns 13 other brands that each annually earn at least US$1 billion:[6]

  • Coca-Cola
  • Fanta
  • Sprite
  • Diet Coke/Coca-Cola Light
  • Coca-Cola Zero
  • Minute Maid
  • Georgia Coffee
  • Powerade
  • Del Valle
  • Schweppes
  • Aquarius
  • Minute Maid Pulpy
  • Dasani
  • Simply
  • Vitaminwater
  • Gold Peak
  • Fuze Tea
  • Ice Dew
  • smartwater
  • Ayataka.

Figure 2. The Coca-Cola Company’s billion-dollar brands

Coca-Cola company's 21 billion-dollar brands logos.

Source: The Coca-Cola Company[7]

No other business in the beverage industry owns as many billion-dollar brands as The Coca-Cola Company.

What does a diversified portfolio provide for the company? First, The Coca Cola Company depends less on one or two of its beverages to generate the majority of its revenue. Second, with so many beverage drinks in so many flavors, the business can satisfy every consumer’s needs and tastes. Third, if the demand for one of the company’s beverages falls sharply (as it is now with Coca-Cola) the business can rely on other beverages to generate higher sales.

Few of The Coca Cola Company’s rivals can enjoy such a diversified brand portfolio, which provides strong competitive advantage over the rivals.


1. Strong reliance on carbonated soft drinks to generate the majority of the company’s revenue

In 2017, The Coca-Cola Company earned US$35.410 billion of which at least 70% or over US$24 billion were earned through selling various carbonated soft drinks (CSD). Currently, the demand for CSD is declining considerably in the U.S., which is the company’s single largest market. Due to the various studies that stress the negative health effects from drinking sugary sparkling beverages,[14] consumers’ preferences are shifting from CSD to low calorie unsweetened beverages, such as water, tea and coffee.

Figure 3. Worldwide unit case volume share by product category

Coca Cola Company earned 69% of its reveneu through selling sparkling beverages and 31% by selling still beverages.

Source: The Coca-Cola Company financial report[1]

According to Beverage Marketing Corporation data,[15] the market for CSD has been declining for the past 10 years. In 2006, an average U.S. consumer drank 50.4 gallons of CSD per year. In 2016 (no data for 2017 yet), this number declined by 23.6% to 38.5 gallons.[15] The report also indicates that CSD market will likely continue to decline over the next few years as well.

The declining demand for CSD is the major company’s weakness as it heavily relies on carbonated soft drinks such as Coca-Cola, Diet Coke, Sprite and Fanta for the majority of the sales. The company’s rivals, which rely less on CSD for their revenue, are less affected by the changing customer preferences.

In order to return to growth, The Coca-Cola Company should minimize its dependence on sparkling beverages and heavily invest into and market still beverages, which are more profitable for the company and healthier for consumers.


1. Expansion of ready-to-drink (RTD) coffee products in the U.S. market

According to the Beverage Marketing Corporation Report, the fastest growing liquid beverage segment in the U.S. in 2013, 2014 and 2015 was RTD coffees.[18][19][20] In 2016, RTD coffees was the second fastest growing beverage segment in the U.S. beverage industry, growing by an impressive 11%.[21] The RTD coffee segment grew 3 times faster than the entire U.S. liquid beverage market, which grew by only 3.4% in 2016.

Figure 4. RTD coffee growth compared to the growth of the whole liquid beverage market in the U.S.

The beverage industry as a whole grew only by 9.6% during 2012-2016, while RTD coffees grew by a staggering 66.4% over the same period.

Source: Beverage Marketing Corporation [18][19][20][21][22]

While, the beverage industry as a whole grew only by 9.6%, RTD coffees grew by a staggering 66.4% over the last 5 years.

In 1975, The Coca-Cola Company’s subsidiary in Japan launched RTD coffee brand, named Georgia, into the market. Georgia became a success in Japan and the company introduced the brand to the U.S. in 2009. These coffees currently mainly sell to Asians in the United States. The company also expanded its Gold Peak RTD tea brand, which offers cold-brew RTD coffee as well. In addition to its own brands, The Coca-Cola Company now sells Dunkin’ Donuts Iced Coffee beverages across the U.S.

Although the segment is relatively small, The Coca-Cola Company could further promote its Georgia brand in the U.S. market to establish itself as the RTD coffee leader in its home country. There are also many smaller growing RTD coffee brands that could be easily acquired and would increase the company’s RTD coffee portfolio and the market share in the RTD coffee market.


1. Obesity concerns may reduce demand for some of the company’s products

According to The Coca-Cola Company’s financial report,[1] obesity concerns are the no.1 threat that is affecting the company:

“There is growing concern among consumers, public health professionals and government agencies about the health problems associated with obesity. Increasing public concern about obesity; other health-related public concerns surrounding consumption of sugar-sweetened beverages; 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.”[1]

Obesity concerns are already significantly affecting some of the beverage segments, mainly carbonated soft drinks segment, which is the largest Coca-Cola’s market. In 2017, the company sales have decline by 15.4% from US$41.863 billion in 2016 to US$35.410 billion in 2017. The decline is mainly attributed to the consumers’ choice to buy and consume healthier drinks. This threat is not going away anytime soon and The Coca-Cola Company will see its sales declining or growing only slowly because of it.

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Published: March 15, 2018
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Pages: 28
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