The Coca Cola Report

8/8/2019 The Coca Cola Report

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The Coca-Cola Company

The Coca-Cola Company

Type

Public (NYSE: KO)

Dow Jones Industrial Average

Component

Industry Beverage

Founded 1892

Headquarters Atlanta, Georgia, U.S.

Area served Worldwide

Key peopleMuhtar Kent

(Chairman and CEO)[1]

Products

Coca-Cola

CarbonatedSoft Drinks

Water

OtherNon-alcoholic beverages

[2]

Revenue US$31.0 Billion (FY 2009)[3]

Operating income US$8.23 Billion (FY 2009)[3]

Net income US$5.82 Billion (FY 2009)[3]


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billion the latest figure in2010shows that now theyserve1.6 billiondrinks

everyday). Of these, beveragesbearing the trademark " Coca-Cola" or"Coke"

accounted forapproximately 78%of theCompany's total gallonsales.

Alsoaccording to the2007 Annual Report, Coca -Colahadgallonsalesdistributedasfollows:

y 4 % in the nited States

y 7% in exico,India, Brazil, apanand the P eople's RepublicofChina

y 20%spread throughout therest of theworld, wag1styl

In2010 it wasannounced that Coca -Colahadbecome the first brand to top 1billion

inannual K grocerysales .

Corporate Governance

HE LTH ND WELLNESS DVISO Y COUNCIL (HWAC)

At Coca-Cola we believe that Industry has a role to play in helping the Indian

consumers lead healthier lives. Coca-Cola is committed to develop and launch a

portfolio of health & wellness products that enable the Indian consumer to lead

healthier lives. he Health & ellness AdvisoryCouncil H& AC)shares thisbelief

andwill guideandassist Coca-Cola in India to:

Identify & highlight theevolvingnutritional needsof IndianConsumers

Suggest viablehealth & wellnesssolutions forbeverageapplica tions Asdesiredby

theconsumers

Support consumereducationprograms that promotehealthy & active lifestyle

codeofbusinessconductoreaffirmourcommitment toethical behaviourasanorganizationandas

individuals, we issuedarevisedCodeof BusinessConduct in2002 toevery

employeeworldwide. hiscodecontinues toserveasaguide toouractions,

advancingandprotectingourcorevaluesof Honesty, Integrity, iversity, Quality,

Respect, Responsibilityand Accountability.


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AdvisoryCouncil forEnvironment & Sustainability (ACES)

Inaddition to India Advisory Board, Coca -Cola Indiahasset upan AdvisoryCouncil

forEnvironment & Sustainability ACES) tohelpandguide thecompany topreserve,

protect andenhance theenvironment. he ACES shall alsoensure that thecompany

uses itsresourcesandcapabilities toprovideactive leadershiponenvironment

relatedmattersrelevant to itsbusiness.

Environmentpolicy

eat Coca-Cola Indiaare in thebusinessofbeverages that refreshpeople. ewill

carryout ouroperations inways that Protect, Preserveand Enhance the

Environment wework in. OuractivitiesareguidedbyCo ca-ColaeKOsystem, which

providesa framework to transform thisprinciple inactions.

Towardsthisobjective, itshall endeavorto:

1. Establish, maintain and operate facilities to comply with all applicable

Environmental Safetyand Health laws, Statutesand Consents.

2. Formulating sound environmental objectives and targets and integrate a

continuousprocessreview inall essential elementsofcorporatemanagement.

. Conservation of natural resources specifically in water, energy and Fuel by

continually improving itsusageandreducingwastage.

4. orkingascatalyst toenhancecollectionofpost consumer PE bottles through

awarenessprogramsandsynergizingrelevant agencies forgettingbetterpricing

to theconsumer.

5. Seek Co-operation with Public, Private and overnmental Organizations in

identifyingsolutions torelevant environmental issues.

6. Advertising initiatives are to be critically evaluated while advertising in Eco -

sensitive areas. o not put advertisement on Historical onuments, Religious,

Political Bui ldings & Structuresandotherspeciallyprotectedandsensitiveareas.

7. singcoolingequipment withenvironmentally friendly technologies.

8. anaging fleet operations in a manner to minimize environmental impacts by

ensuringgoodmaintenance, improving & t racking fuel efficiencyandeffectively

managingwastes.


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9. Ensuring Procurement policies that consider the environmental impact of

packaging materials and all direct and indirect process aids used within the

operation.

10. Ensuringall operations implement eKO anagement Systemand requirements

under ISO14001before ecember2004.

hispolicyhasbeencommunicated toall associatesofCoca -Cola India toensure

complianceandshall bemadeavailable topublicand interestedpartiesondemand.

Humanri htsstatementandworkplaceri htspolicy

Humanri htsstatement

hereputationof heCoca-ColaCompany isbuilt on trust andrespect. Ouremployeesand thosewhodobusinesswithusaround theworldknowweare

committed toearning theirtrust withaset ofvalues that represent thehighest

standardsofquality, integrity, excellence, compliancewith the lawandrespect for

theuniquecustomsandcultures in thecommunitieswhereweoperate.

OurCompanyhasalwaysendeavored toconduct businessresponsiblyandethically.

erespect international humanrightsprinciplesaimedat promot ingandprotecting

humanrights, including the nited ations eclarationof Human Rightsand theInternational LaborOrganization's eclarationon Fundamental Principlesand Rights

at ork, andweactivelyparticipate in the nited ations lobal Compact.

Ouracknowledgment of these international principles isconsistent withour

dedication toenriching theworkplace, preserving theenvironment, strengthening the

communitieswhereweoperateandengagingwithourstakeholders topursue

progress toward thesegoals.

Inourworkplacesand thecommunities inwhichweoperate, webelieve that a

seriouscommitment tohumanrights is fundamental to thewayweconduct our

business. e treat ouremployeeswithdignity, fairnessandrespect, andweare

guidedbyoursharedvaluesof integrity, collaborationandaccountability.


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Ourcommitment is formalizedandmanifested throughvariouspolicies includingour

orkplace Rights Policy, ourCodeof BusinessConduct andourenvironmental

governanceandmanagement system s. hile thesepoliciesapply to heCoca-Cola

Companyandall of theentities that it ownsor inwhich it holdsamajority interest,

theCompany iscommitted toworkingwithandencouragingourindependent bottling

partners touphold thevaluesandpracti ces that thesepoliciesdrive.

heCoca-ColaCompanyand itsbottlingpartnersjointlyunderstand that the true

measureofawell-managedbusiness isnot just weatherit is financiallysuccessful,

but how it achieves that success. Asoursystemdoesbusinessaround theworld

touchingsomanydifferent anddistinct local cultures, weknow that itsnot enough to

beprofitable, wemust alsoberesponsible. his isbest achieved inCoca -Colas

uniquebusinesssystemwhen theCompanyandbottlerswork together towardour

sharedgoals.

ehaveexpressed thesesharedgoals inaglobal framework forgoodcorporate

citizenshipand local accountabilitycalledCitizenship @ Coca -Cola. he framework

consistsofacommitment toembraceasharedset ofprinciplesacrossourglobal

systemand isdesigned tomeasureanddrive improvement in fourareasof

operation: workplace, marketplace, communityandenvironment. eexpect the

individual companies that belong tooursystem toaccept theaccountability to liveup

to thiscommitment andapply theseprinciples toevery facet of their local operations.

hroughourSupplier uiding Principles Program, weworkwithourdirect suppliers

toensure that theyuphold lawsandregulations in theworkplaceandconduct their

businessethicallyandresponsibly.

WO PLACE IGHTS POLICY

evalue therelationshipwehavewithouremployees. hesuccessofourbusiness

dependsoneveryemployee inourglobal enterprise. earecommitted to fostering

openand inclusiveworkplaces that arebasedonrecognizedworkplacehuman

rights, whereall employeesarevaluedand inspired tobe thebest theycanbe.

heCoca-ColaCompany's orkplace Rights Policy isguidedby international


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humanrightsstandards, including the niversal eclarationof Hu man Rights, the

International LaborOrganization's eclarationon Fundamental Principlesand Rights

at orkand the nited ations lobal Compact.

he orkplace Rights Policyapplies to heCoca -ColaCompanyandall of the

entities that it ownsorinwhic h it holdsamajority interest. heCompany is

committed toworkingwithandencouragingourindependent bottlingpartners to

uphold theprinciples in this Policyand toadopt similarpolicieswithin their

businesses.

The Policy includesthefollowingcomponents:

Freedomof AssociationandCollective Bargaining

Forced Labor

Child Labor

iscrimination

ork Hoursand ages

Safeand Healthy orkplace

orkplace Security

Communityand StakeholderEngagement

CS Visionand Guidelines

CS VISION O INDIA BUSINESS UNIT

obea trustedpartnercontributing to thesocial, economicandenvironmental

progress

MISSION

osociallyandeconomicallyempowercommunitiesaroundouroperations,


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bycreatingenablingenvironment aroundourplants, forthebetterment of

communities throughsustainableprojects

P EAMBLE

At Coca-Cola, wearecommitted tocontributeourtime, expertiseand

resources tohelpcommunities inpartnershipwith local lea ders.

heseguidelinesshall help ivisionandbottlingunits to identify initiativesand

projects that theycouldundertake in theirrespectiveareasofoperation.

CS GUIDELINES

ewill work towardsattaining themost efficient andoptimumusageof water

Endeavor to achieve et Zero w.r.t. groundwater i.e. to strive to recharge

groundwaterequivalent to thesameused inouroperations.

rive to facilitate equitable access of clean drinking water to communities

aroundourplantsandsupport protectionofwatersheds insuchareas.

Have measurable goals to conserve the environment in collaboration with

local communities.

Endeavortorecycleall oursolidwastesmaterials including PE articles.

Strive to conserve energy and would comply with national and applicable

international standards/practices.

ispose and manage bio solids, as per law of the land and prevailing

regulations, to minimize the impact on the environment and adopt

environmental friendlypractices.

ork for practical sustainable solutions for disposal of bio-solids and other

wastesandhelpspreadawarenessof thesame.

attempt to establish partnership with overnment, Os and communities

andother relevant agencies, to launchand manageprojects incommunities

aroundouroperations.

ork closely with our bottling partners and share resources - technical,

humanand financial - forthesustainabledevelopment of local communities.


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Promote Healthyandactive living/lifestyle inworkplace, inmarketplaceand in

communities.

Incorporateoursocial responsibilityasapart of theCompanysbusinessplan.

Promoteandencourageemployeevolunteerism incommunitywork.

e stand committed towards our associates, their families and the

communitiesaroundouroperations, to improve theirqualityof lifeasawhole

throughhealth, education, andwatermanagement programs.

eshall commit apercentageof thecompanys turnover forCSR initiatives .

Raw Materials

Carbonatedwaterconstitutesup to94%ofasoft drink. Carbondioxideadds that

special sparkleandbite to thebeverageandalsoactsasamildpreservative.

Carbondioxide isanuniquelysuitablegas forsoft drinksbecause it is inert, non -

toxic, andrelatively inexpensiveandeasy to liquefy.

hesecondmain ingredient issugar, whichmakesup 7 -12%ofasoft drink. sed in

eitherdryor liquid form, sugaraddssweetnessandb ody to thebeverage, enhancing

the "mouth-feel," an important component forconsumerenjoyment ofasoft drink.

Sugaralsobalances flavorsandacids.

Sugar-freesoft drinksstemmed fromasugarscarcityduring orld arII. Soft drink

manufacturers turned tohigh-intensitysweeteners, mainlysaccharin, whichwas

phasedout in the1970swhen it wasdeclaredapotential carcinogen. Othersugar

substituteswere introducedmoresuccessfully, notablyaspartame, or utra -Sweet,

whichwaswidelyused throughout the1980sand1990s fordiet soft drinks. Because

somehigh-intensitysweetenersdonot provide thedesiredmouth -feel andaftertaste

ofsugar, theyoftenarecombinedwithsugarandothersweetenersand flavors to

improve thebeverage.

heoverall flavorofasoft drinkdependsonan intricatebalanceofsweetness,

tartness, andacidity pH). Acidsaddasharpness to thebackground tasteand

enhance the thirst-quenchingexperiencebystimulatingsaliva flow. hemost


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commonacid insoft drinks iscitricacid, whichhasa lemony flavor. Acidsalso

reducepH levels, mildlypreserving thebeverage.

Verysmall quantitiesofotheradditivesenhance taste, mouth -feel, aroma, and

appearanceof thebeverage. here isanendlessrangeof flavorings; theymaybenatural, natural identical chemicallysynthesized imitations), orartificial chemically

unrelated tonatural flavors). Emulsionsareadded tosoft drinksprimarily toenhance

"eyeappeal" byservingascloudingagents. Emulsionsaremixturesof liquids tha t

aregenerally incompatible. heyconsist ofwater -basedelements, suchasgums,

pectins, andpreservatives;andoil-based liquids, suchas flavors, colors, and

weighingagents. Saponinsenhance the foamyheadofcertainsoft drinks, likecream

sodaandgingerbeer.

o impede thegrowthofmicroorganismsandprevent deterioration, preservatives

areadded tosoft drinks. Anti -oxidants, suchas BHA andascorbicacid, maintain

colorand flavor. Beginning in the1980s, soft drinkmanufacturersopted fornatur al

additives inresponse to increasinghealthconcernsof thepublic.

Impurities in thewaterareremoved throughaprocessofcoagulation, filtration, and

chlorination. Coagulation involvesmixing floc into thewatertoabsorbsuspended


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particles. hewateris thenpoured throughasand filtertoremove fineparticlesof

Roc. osterilize thewater, small amountsofchlorineareadded to thewaterand

filteredout.

The Manufacturing Process

ost soft drinksaremadeat local bottlingan dcanningcompanies. Brandname

franchisecompaniesgrant licenses tobottlers tomix thesoft drinks instrict

accordance to theirsecret formulasand theirrequiredmanufacturingprocedures.

Clarifyingthewater

1 hequalityofwateriscrucial to the successofasoft drink. Impurities, suchas

suspendedparticles, organicmatter, andbacteria, maydegrade tasteandcolor.

heyaregenerallyremoved through the traditional processofaseriesof

coagulation, filtration, andchlorination. Coagulation i nvolvesmixingagelatinous

precipitate, orfloc ferricsulphateoraluminumsulphate), into thewater. he floc

absorbssuspendedparticles, making them largerandmoreeasily trappedby

filters. uring theclarificationprocess, alkalinitymust beadjus tedwithan

additionof lime toreach thedesiredpH level.

iltering,sterilizing,anddechlorinatingthewater

2 heclarifiedwaterispoured throughasand filtertoremove fineparticlesof

floc. hewaterpasses througha layerofsandandcourser bedsofgravel to

capture theparticles.

Sterilization isnecessary todestroybacteriaandorganiccompounds that might

spoil thewater's tasteorcolor. hewaterispumped intoastorage tankand is

dosedwithasmall amount of freechlorine. hechl orinatedwaterremains in the

storage


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tank forabout twohoursuntil thereaction iscomplete.

4 ext, anactivatedcarbon filterdechlorinates thewaterandremovesresidual

organicmatter, much like thesand filter. A vacuumpumpde -aerates thewater

before it passes intoadosingstation.

Mixingthe ingredients

5 hedissolvedsugarand flavorconcentratesarepumped into thedosingstation

inapredeterminedsequenceaccording to theircompatibility. he ingredientsare

conveyed intobatch tankswhere theyarecarefullymixed; toomuchagitationcan

causeunwantedaeration. hesyrupmaybesterilizedwhile in the tanks, using

ultraviolet radiationorflashpasteurization, which involvesquicklyheatingand

cooling themixture. Fruit basedsyrupsgenerallymust bepasteurized.

6 hewaterandsyruparecarefullycombinedbysophisticatedmachines, called

proportioners, whichregulate the flowratesandratiosof the liquids. hevessels

arepressurizedwithcarbondioxide toprevent aerationof the mixture.

Carbonatingthebeverage

7 Carbonation isgenerallyadded to the finishedproduct, though it maybemixed

into thewaterat anearlierstage. he temperatureof the liquidmust becarefully


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controlledsincecarbondioxidesolubility increasesas the liquid temperature

decreases. anycarbonatorsareequippedwith theirowncoolingsystems. he

amount ofcarbondioxidepressureuseddependson the typeofsoft drink. For

instance, fruit drinksrequire farlesscarbonation thanmixerdrinks, suchas

tonics, whicharemeant tobedilutedwithotherliquids. hebeverage isslightly

over-pressuredwithcarbondioxide to facilitate themovement intostorage tanks

andultimately to the fillermachin e.

Fillingandpackaging

8 he finishedproduct is transferred intobottlesorcansat extremelyhigh flow

rates. hecontainersare immediatelysealedwithpressure -resistant closures,

eithertinplateorsteel crownswithcorrugatededges, twist offs , orpull tabs.

9 Becausesoft drinksaregenerallycooledduring themanufacturingprocess,

theymust bebrought toroom temperaturebefore labeling toprevent

condensation fromruining the labels. his isusuallyachievedbyspraying the

containerswithwarmwateranddrying them. Labelsare thenaffixed tobottles to

provide informationabout thebrand, ingredients, shelf life, andsafeuseof the

product. ost labelsaremadeofpaper thoughsomearemadeofaplastic film.

Cansaregenerallypre-printedwithproduct informationbefore the fillingstage.

10 Finally, containersarepacked intocartonsortrayswhichare thenshipped in

largerpalletsorcrates todistributors.

QualityControl

Soft drinkmanufacturersadhere tostrict waterqualitystandards forallowable

dissolvedsolids, alkalinity, chlorides, sulfates, iron, andaluminum. ot only is it in

the interest ofpublichealth, but cleanwateralso facilitates theproductionprocessandmaintainsconsistency in flavor, color, andbody. icrobiological andother

testingoccurregularly. he ational Soft rink Associationandotheragenciesset

standards forregulating thequalityofsugarandotheringredients. Ifsoft drinksare

producedwith low-qualitysugar, particles in thebeveragewill spoil it, creating floc.


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Toprevent suchspoilage, sugarmust becarefullyhandled indry, sanitized

environments.

It iscrucial forsoft drinkmanufacturers to inspect rawmaterialsbefore theyar e

mixedwithotheringredients, becausepreservativesmaynot kill all bacteria. Alltanks, pumps, andcontainersare thoroughlysterilizedandcontinuouslymonitored.

Cans, madeofaluminumalloyor tin-coated low-carbonsteel, are lacquered

internally toseal themetal andprevent corrosion fromcontact with thebeverage.

Soft drinkmanufacturersalsorecommendspecificstorageconditions toretailers to

insure that thebeveragesdonot spoil. Theshelf lifeofsoft drinks isgenerallyat

least oneyear.

Recycling

The 27 billiondollarsoft drink industrygeneratedabout 110billioncontainerseach

year in theearly1990s. About halfofsoft drinkcontainerswerealuminumcansand

theotherhalf, about 5billion, were PETplasticbottles. early 60%of all soft drink

containers were recycled, the highest rate for any packaging in the nited States.

Environmental concerns continued to lead to improvements and innovations in

packaging technology, including the development of refillable and reusable

containers.

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