Coca-Cola(KO)2025-02-20 20:17Sales and Market Performance - The Coca-Cola system sold 33.7 billion unit cases in 2024, a slight increase from 33.3 billion in 2023, with sparkling soft drinks representing 69% of the volume in both years[31] - Trademark Coca-Cola accounted for 47% of worldwide unit case volume in both 2024 and 2023, while in the U.S., it represented 42% of the unit case volume[31] - In 2024, the U.S. unit case volume accounted for 16% of the Company's worldwide total, with 61% of that volume being sparkling soft drinks[31] - The largest markets outside the U.S. for unit case volume were Mexico, China, Brazil, and India, which together accounted for 33% of the worldwide total[31] - The second and third quarters historically account for the highest sales volumes, indicating seasonality in beverage sales[46] Operations and Supply Chain - The Company provides marketing support and participates in sales of other beverage brands through licenses and joint ventures, including Monster Energy distribution agreements[28] - The Company makes its products available in over 200 countries, with consumers enjoying 2.2 billion servings daily[30] - The Company has implemented an incidence-based concentrate pricing model to align financial objectives with bottlers and adapt to changing consumer needs[34] - The five largest independent bottling partners represented 44% of total worldwide unit case volume in 2024[32] - The company may acquire or take control of bottling operations in underperforming markets to improve performance and efficiency[44] Competition and Market Environment - The company operates in a highly competitive commercial beverage industry, facing significant competition from major players like PepsiCo, Nestlé, and Anheuser-Busch InBev[47] Raw Materials and Sourcing - Key raw materials include high fructose corn syrup (HFCS) and sucrose, with HFCS prices historically subject to market fluctuations[52] - The company sources orange juice and concentrate primarily from Florida and Brazil, facing challenges from citrus greening disease and adverse weather conditions[54] - The company generates most of its coffee revenues through Costa, which sources certified green coffee from multiple suppliers to mitigate weather-related yield impacts[56] - The company has not experienced significant shortages in obtaining non-nutritive sweeteners, which are critical for its product formulations[53] Environmental and Regulatory Compliance - Compliance with environmental regulations is a priority, with ongoing expenditures aimed at achieving sustainability goals[65] - The company is subject to various cybersecurity and data protection laws, including the California Consumer Privacy Act, which may impact its data practices[66] Human Capital and Workforce - The board of directors oversees talent management and compensation strategies, emphasizing the importance of human capital in business operations[68] - The company recognizes water availability and sustainability as key challenges, given its reliance on water as a primary ingredient in its products[51] - As of December 31, 2024, the company had approximately 69,700 employees, a decrease from 79,100 in 2023, primarily due to refranchising activities[69] - Approximately 400 employees in North America were covered by collective bargaining agreements as of December 31, 2024[70] - The company focuses on providing access to equal opportunities and fostering belonging in workplaces and local communities[71] Financial Performance and Risk Management - The company generated 18,442 million and 511 million decrease in the fair value of foreign currency derivatives that qualified for hedge accounting[376] - The company estimates that a 1 percentage point increase in interest rates would have increased interest expense by 386 million and 2 million as of December 31, 2024[381] Employee Benefits - The company aims to provide competitive employee benefits packages, which may include a 401(k) plan, medical and dental insurance, and tuition assistance[78]