The Coca-Cola Company (KO US): Buy: The balance of volume and price

研报英文原文证据摘录

The Coca-Cola Company (KO US): Buy: The balance of volume and price

to happen, Coke’s marketers will have to be

effective at keeping their core brands relevant for consumers, create demand, and 110.00

innovate. In emerging markets with higher per capita consumption levels than NA, 85.50

such as Mexico and Brazil, where the cost of capital is high, bottlers no longer need 61.00

to lean disproportionately on the pricing lever as they can gain fixed cost absorption 07/25 01/26 07/26

Target price: 98.00 High: 88.27 Low: 65.67 Current: 88.27

of delivery by putting other products such as beer, wine and spirits on the Coke

trucks. But in North America there is no such “Plan B” for dealing with the eroding Source: LSEG IBES, HSBC estimates

scale of bottling, logistics and delivery if Coke’s marketers fall short. Just look at

Carlos Laboy

independent Pepsi bottlers in NA and LatAm for a glimpse at what happens to weak Global Beverage Head, LatAm Food Analyst

soda brands that can’t easily justify price increases to consumers. These bottlers hit HSBC Securities (USA) Inc.

carlos.a.laboy@us.hsbc.com

the breaking point sooner and can’t seem to recover. With management of KO +1 212 525 6972

focused on demand creation, innovation and on evolving a viable client centric Sorabh Daga*

economic model for its bottlers, we are less worried given their track record in LatAm. Analyst, Global Beverages, LatAm Food

HSBC Securities and Capital Markets (India) Private Limited

sorabh.k.daga@hsbc.co.in

In India, the company is sustaining high levels of investment alongside its +91 80 4550 2627

bottlers. The firm is co-investing in cold equipment and in affordable soft drink

Santiago Bringas*

presentations for entry level consumers. We model this to fade later in the year.