History of the relationship.

Up until this point in time, the Coca-Cola Company (Coke) produced the syrup used to make Coca-Cola. The syrup was then sold to bottlers such as Coca-Cola Enterprises where the final product was finished and distributed to merchants throughout the world. This arrangement has worked over the years but with a changing industry, it is no longer the most cost effective way to operate.

The need for change.

Both companies have recognized the need for change and believe partnering up will benefit both consumers and shareholders alike. The production and distribution systems currently in use were created decades ago and with the hundreds of options available to consumers today, seem painfully antiquated. Merchants need lower prices and in order to become more cost effective, the supply chain system has to be upgraded to meet the the demands of today as well as future demands.

Moving forward.

With Coca Cola Company and the North American operations of Coca-Cola Enterprises combining forces, customers and consumers can expect a more streamlined system moving forward. This will reduce costs across the board and increase profits for shareholders and stakeholders. The transaction is one that doesn’t involve cash, rather an exchange of control from one company to the next. According to a press release on CCE’s website, “A new entity, which will retain the name Coca-Cola Enterprises Inc., will be created through a split-off that will hold CCE’s European businesses. CCE’s public shareowners will exchange each existing CCE share for a share in the new entity and will hold 100 percent of this new entity.” In addition, “In a concurrent agreement, The Coca-Cola Company and CCE have agreed in principle that CCE will buy The Coca-Cola Company’s bottling operations in Norway and Sweden for $822 million, subject to the signing of definitive agreements, and that CCE will have the right to acquire The Coca-Cola Company’s 83 percent equity stake in its German bottling operations 18 to 36 months after closing for fair value.” The future looks bright for both companies and hopefully both investors and consumers will benefit from the transaction.

Change In The Future For Coke and Coca-Cola Enterprises (NYSE: KO, CCE) was created by and is property of American Consumer News.

Coconut water, a mainstay drink in many Latin American countries, is “made” by extracting the clear liquid from young coconuts.  This liquid is removed before the meat of the coconut can form.  The meat of a coconut is where coconut milk and oil, come from.  The milk and oil are full of fat, while coconut water is fat free and full of minerals such as potassium, calcium, phosphorous, magnesium, and sodium. It’s these electrolytes that athletes and parents appreciate as a workout drink to replace the sugar laden sports drinks that are in the marketplace today.  Coconut water looks like a lightly cloudy liquid with a slightly sweet and nutty taste. It has been purported to be an anti- aging tonic.   There have been many other claims as to the benefits of coconut water including the relief of constipation, lower blood pressure, and relief of vision problems, bladder and kidney disorders.  The benefits have proven to be so effective that the Food and Drug Administration has allowed coconut water to carry the statement that it may “reduce the risk of high blood pressure and stroke”.  Of course all of these benefits come with a price that may dampen the consumer’s enthusiasm.  The cost of a 12 pack of Zico’s coconut water costs $24.  Compare that to Coca Cola’s Dasani water 12 pack at approximately $4 and a 12 pack of Gatorade at around $13.00

Bottled water sales have dried up lately as consumers have returned to their kitchen tap to quench their thirst.   According to a recent Wall Street Journal article, U.S. sales of Coca Cola’s Dasani water fell 26%, while Pepsi’s Aquafina fell just under 14%.  On the other hand the Beverage Market Corp, a New York based brand research consulting firm, found sales of coconut water drenched its competition and doubled its sales this year to 20 million dollars.   Coconut water is seen as a new and profitable avenue for Coca Cola, Pepsi and many other companies who hope to immerse themselves in the coconut water craze.

Coconut Water Trend Hopes To Crack Open The Beverage Industry was created by and is property of American Consumer News.