The Coca-Cola Company (KO) is organized into the following six operating groups:
- Eurasia and Africa
- Latin America
- North America
- Asia Pacific
- Bottling Investments
The Bottling Investments operating segment includes all company-owned bottling operations except Coca-Cola Refreshment (or CCR). CCR is a part of the North America operating segment. The company’s operating structure also includes the corporate segment.
Revenues decline across segments
Revenues in the fourth quarter of 2014 declined across all segments except the North America segment.
Revenues for the Asia Pacific segment declined by 10% due to unfavorable product and channel mix as well as currency fluctuations.
Overall, the company’s other international segments were impacted by weakening foreign currencies and a strengthening dollar.
North America segment surprises
After registering a weak performance over a long period of time, Coca-Cola’s North America segment finally saw revenues grow in 4Q14 by 2% to $5.4 billion compared to the prior-year quarter. The increase was driven by higher pricing.
The North America segment is Coca-Cola’s largest segment. For the past few years, it has experienced a weakness in the carbonated soft drink (or CSD) category. In the fourth quarter of 2014, the segment’s CSD beverage volumes remained flat. Volumes for still beverages grew by 3%.
Still beverages such as flavored water and ready-to-drink tea are in demand due to growing health concerns around carbonated beverages.
Nonalcoholic beverage companies such as Coca-Cola (KO), PepsiCo Inc. (PEP), Dr Pepper Snapple Group Inc. (DPS), and Monster Beverage Corporation (MNST) have been facing immense criticism for the impact of their soda drinks on consumers’ health.