According to an article on Reuters, Coca-Cola (NYSE: KO) is feeling the pressures of the flat domestic marketplace. COO Muhtar Kent, who will soon become the CEO, said in comments at a speaking event in Japan that Coke will be evaluating an acquisition strategy to grow the long-term prospects of its beverage business.

Now, this doesn't mean that a large purchase or merger is on the horizon, but it does mean that shareholders can expect, according to Kent, small, targeted asset buys. He did, however, specifically state that the company isn't giving up on organic growth, either, in its quest to expand its presence in beverages and beat back the ongoing threat of enemy number one, PepsiCo (NYSE: PEP).

He better not be giving up on it. Coke's stock recently retreated from its 52-week high of $65.59 to a price, as of noon today, of $56.37. The stock has done well over the last year, and this could be considered a normal consolidation. However, there has been a lot of buzz lately about Coke's domestic weakness.

Continue reading Coke's Muhtar Kent says acqusitions needed for growth - is he right?

Coke's Muhtar Kent says acqusitions needed for growth - is he right? originally appeared on BloggingStocks on Wed, 14 May 2008 13:05:00 EST. Please see our terms for use of feeds.

Coca-Cola Co. (NYSE: KO) really needs to get things going in the North American territory. If you take a look at Coke's latest earnings report, you'll see that unit case volume moved up 1% for the fourth quarter, and down 1% for the entire fiscal year. That's well below the 6% growth in volume experienced overall. It's no wonder that the Associated Press highlighted the problem in North America in a recent article on comments made by Coke's COO Muhtar Kent (he will be the new CEO starting July 1) at a conference in Boca Raton, Florida.

Kent mentioned Coke Zero and the VitaminWater brand -- which Coke gained after acquiring Glaceau last year -- as being two key beverages to leverage to drive growth. They will probably help. I recently tried some of that VitaminWater stuff the other day -- not bad, although I suppose its appeal goes beyond the taste factor, as it basically relies on the consumer feeling healthier after drinking it (at least in terms of perception).

Continue reading Coca-Cola needs a bubbly domestic market

Coca-Cola needs a bubbly domestic market originally appeared on BloggingStocks on Sun, 24 Feb 2008 10:40:00 EST. Please see our terms for use of feeds.

In 2005, hip-hop star 50 Cent (née Curtis Jackson) appeared in a loosely autobiographical film, Get Rich or Die Tryin'. Two years prior, the Eminem protégé had released his debut album of the same name. The album was a critical and commercial success; the same can't be said for the movie. Either way, while nine bullets legendarily attempted to fell Jackson in his youth, it's safe to say 50 has achieved his goal of impressive wealth. In September, "Fiddy" appeared second on Forbes list of "Hip-Hop Cash Kings," banking $32 million in 2006 alone.

In May 2007, Coca-Cola (NYSE: KO) purchased a little company called Glaceau, which makes Vitaminwater. The soft-drink giant's $4.2 billion cash and stock purchase translated into a payout of $400 million for 50 Cent, who held a sizable stake in the brand (his estimated profit after taxes was around $100 million). Other 50 Cent projects include the G-Unit record label, a clothing line, a sneaker line through the Reebok brand, ring tones, and video games -- to name only a few.

Continue reading Money Winners of 2007: 50 Cent parlays H2O into serious dough

Money Winners of 2007: 50 Cent parlays H2O into serious dough originally appeared on BloggingStocks on Sat, 15 Dec 2007 17:10:00 EST. Please see our terms for use of feeds.

The cola wars between Coca-Cola (NYSE: KO) and Pepsi (NYSE: PEP) that consisted of a high-profile battle for carbonated supremacy are quiet for now and, according to some experts, it's hurting the industry.

Some industry experts predict that soda sales will decline 1% per year for the next ten years. The accuracy of such a forward-looking prediction aside, it puts a lot of pressure on the soda companies.

Coke responded with its high-profile acquisition of Glaceau, the maker of VitaminWater, and Pepsi is preparing the launch of Tava, "An Inspired Sparkling Beverage" promising "Zero Calories. Zero Caffeine. Zero Worries." The packaging looks slick and the flavors -- Tahitian Tamure, Mediterranean Fiesta, and Brazilian Samba -- certainly sound enticing. The product will launch in the first half of 2008, but Pepsi investors should be wary of putting too much faith in it. A large percentage of new beverages fail to catch on with consumers -- Remember Crystal Pepsi, Pepsi Blue, and New Coke?

Maybe they'll be able to compensate for the decline in categories like energy drinks and vitamin-enhanced water -- but investing in Coca-Cola when you think Coke is headed for a long decline seems silly -- especially given that the stock hit a multi-year high on Friday.

With the decline -- and expected continuation of the decline -- in soft drink sales, you also have to wonder about Jones Soda's (NASDAQ: JSDA) prospects. The company has its own serious internal problems, and trying to make a comeback in a declining industry could prove too much for it to handle.

Perhaps big new marketing campaigns and a rebirth of the cola wars can help brighten soda's prospects -- but if the decline is caused by factors like increasing health-consciousness and a preference for noncarbonated drinks, it might just be a big waste of money.

Cola companies face a tough road ahead originally appeared on BloggingStocks on Sat, 15 Dec 2007 12:10:00 EST. Please see our terms for use of feeds.

This post is part of our Hottest Products of 2007 feature. Also check out our other Hottest Products of 2007 posts and let us know which product you think is the greatest thing since sliced bread.

When I first discovered the products of glacéau, maker of Vitaminwater, it was the summer of 1998, and there were four flavors of Fruitwater. The lemon ginger flavor was strange, at best, but I could drink an entire cold bottle of watermelon water after a run. Cranberry mint was curious and refreshing. They were lovely, with the tiniest hint of color and no sugar: what I'd always wished for in a bottled water.

Cut to 2007, when, in order to cater to the mass market's taste for sweets and the craze for vitamin-enhanced beverages, glacéau's Vitaminwater has been stocked with sugar and color. This summer, Vitaminwater was being guzzled by all my friends' children at family barbecues and birthday parties. The day-glo orange and green look oh-so much like the Kool-Aid and Gatorade we drank in decades past, and I have to say they're just as sweet. The watermelon water I loved has been replaced by four new flavors, all "naturally" sweetened; peach, raspberry, grape, lime. Sounds like Lifesavers! The kooky Whitestone, Queens management has sold (out?) to Coca Cola (NYSE: KO) for $4.2 billion. 50 Cent, famously, had a big payout thanks to his prescient investment in the stuff (he wanted to put his money in something healthier than his rap rivals' liquor ventures). For Coke, of course, it was just the latest salvo in the next generation of the cola wars (now it's enhanced waters and super-premium juices, but it's still the same ol' Coke vs. Pepsi).

Continue reading Hottest Products of 2007: Vitaminwater sweetens your daily H2O

Hottest Products of 2007: Vitaminwater sweetens your daily H2O originally appeared on BloggingStocks on Sun, 25 Nov 2007 10:05:00 EST. Please see our terms for use of feeds.

Brady, who dates a supermodel and makes gossip-column headlines as well as sports news, joins Jennifer Aniston in pitching the distilled water with added electrolytes. Replacement of electrolytes depleted in workouts can ease muscle fatigue. Smartwater is the top enhanced water with yoga enthusiasts, and Aniston has lent the brand a sexy, healthy lifestyle image. Brady adds some muscle to the healthy image.

Coke pays Tom Brady $3 million to sell water originally appeared on BloggingStocks on Wed, 31 Oct 2007 14:16:00 EST. Please see our terms for use of feeds.

Continue reading High school vending machines getting more eclectic

High school vending machines getting more eclectic originally appeared on BloggingStocks on Tue, 21 Aug 2007 18:00:00 EST. Please see our terms for use of feeds.

Last December, over 100 stocks were featured in our Top Picks for 2007 report. Now, at mid-year, we turn to the 20 advisors whose picks showed the strongest gains to get an update on their previous picks, as well as a new favorite stock for the second half of the year.

Yola Edwards, editor of The Income Investor, chose Canadian grocer Sobey's as her top pick for 2007. The stock rose 42% due to a just completed going-private transaction at $58 a share.

The Coca-Cola Co. (NYSE: KO) is her new top pick; she says, "'Coke is it,' or so the company's jingle suggested -- but the share price of Coca-Cola has been in a major downtrend since July 1998. However there are technical signs that indicate the downtrend has ended and an upside breakout is just ahead.

"Investors usually turn to a defensive stock like Coca-Cola in a slowing economic environment, and with first-quarter U.S GDP growth of 0.6%, now might be the time to try some Coke.

"With nearly 400 brands in over 200 countries, Coca-Cola is the world's largest beverage company, but Coke has apparently recognized that it hasn't been 'it' for awhile and has taken steps to join the new generation by spending $4.1 billion to acquire Energy Brands Inc., known as Glaceau, a maker of vitamin-enhanced water.

"Analysts' reactions to the purchase are mixed, calling it overpriced, while others think it's a smart strategic move despite the stiff price tag. With the transaction closing in the summer, it is expected to be accretive to the company's bottom line in 2008.

"In April, Coca-Cola reported first quarter net income of $1.26 billion, or 54 cents per share, up from $1.11 billion or 47cents per share in the prior year. Technical analysis suggests that although a pullback to the 10-month moving average at $49 would offer support and an opportunity, the stock is poised to rally to about $69 over the next year."

Top 20 advisors: Yola Edwards thinks Coke is it originally appeared on BloggingStocks on Wed, 20 Jun 2007 14:00:00 EST. Please see our terms for use of feeds.

Is Jennifer Aniston's latest endorsement deal a 'smart' choice? originally appeared on BloggingStocks on Tue, 19 Jun 2007 13:30:00 EST. Please see our terms for use of feeds.

Coca-Cola's (NYSE: KO) $4.1B purchase of Glaceau, a producer of vitamin-enhanced water, may be just the right 'tonic' to propel it shares to a new 52-week high.

In recent years, the iconic U.S. company has had to confront a triple threat, of sorts: the need to lower costs, fend off relentless competition from rival PepsiCo (NYSE: PEP), and address a secular trend away from carbonated beverages and toward non-carbonated and more nutrition-oriented drinks.

Coke had fallen behind its major competitor -- as well as several niche drink companies -- regarding the incorporation of newer-category drinks that appeal to a more-health conscious clientele. That fact, combined with an above-average cost structure, weighed on KO's performance, and Wall Street did not respond favorably: the stock dropped below $40 in the second half of 2004.

But now Coke's acquisition of Glaceau and its flagship Vitamin Water provides another solid data point for Wall Street that Coke is making the transition to the non-carbonated drink era.

Investment Category: Coca Cola is a moderate-risk stock not suitable for low-risk investors. Coke has the distribution network and products to produce impressive results, but costs must be contained moving forward for the stock to shine.

Coke's catching up in the health drink segment originally appeared on BloggingStocks on Tue, 29 May 2007 19:50:00 EST. Please see our terms for use of feeds.

With soft drink sales stagnating as more health-conscious consumers switch to lower-calorie premium beverages, Coca-Cola (NYSE: KO) is looking for a piece of the action. After the February acquisition of Fuze, Coke is looking at privately-held beverage companies including Glaceau [subscription required], the maker of vitamin water and Arizona Teas, the best iced tea company out there.

While Coke has been delivering slow and reliable growth, Glaceau's has been extremely rapid of late, doubling its cases sold in 2006. Glaceau's price-tag of $2 billion might seem expensive, but it's the number one brand in a category that is expected to account for 22% of North American beverage sales over the next five years, making it second in volume only to bottled water.

With Hansen Natural (NASDAQ: HANS) and Jones Soda (NASDAQ: JSDA) valued at $3.5 billion and $681 million respectively, $2 billion for Vitamin Water might not be so bad.

Coke wants vitamin water originally appeared on BloggingStocks on Wed, 25 Apr 2007 11:02:00 EST. Please see our terms for use of feeds.