Organic Coke: The Real Deal

“Coca-Cola Co. said on Friday it would continue to make acquisitions, but they were not necessary for the world's largest soft drink maker to meet its long-term growth objectives.

“Coca-Cola reiterated its long-term targets to increase its annual sales volume by 3 percent to 4 percent, revenue by 5 percent to 6 percent, operating income by 6 percent to 8 percent and earnings-per-share by a high single-digit percentage rate.

“Those targets do not include acquisitions, said Coke Chief Financial Officer Gary Fayard during a presentation at a conference in Florida hosted by the Consumer Analyst Group of New York.

“‘We will continue to do bolt-on acquisitions but they are not included in the growth model,’ Fayard said, adding that the company's picture of success was to reach its targets by growing its existing business.

“‘We can never replace organic growth with acquisitions,’ said Chief Operating Officer Muhtar Kent, who will soon become chief executive officer. ‘Organic growth is the oxygen of our business.’

“Kent also said that acquisitions would have to be done in a disciplined manner.

“‘You can't just keep adding things to your system,’ Kent said. He also said the company was looking at fewer, but more important brands, than in the past.

“‘We're not focused on big bets that are going to be big and important,’ Kent said.

“Coca-Cola has benefited from its recent acquisitions of FUZE teas and Glaceau vitaminwater, which have boosted sales at a time its traditional carbonated soft drinks, including Coca-Cola, Diet Coke and Sprite, were experiencing sluggish U.S. sales, as many consumers began choosing drinks like bottled water and tea, which are viewed as healthier.”

(“Coca-Cola says M&A not needed for growth targets.” Martinne Geller. www.reuters.com. February 22, 2008)

ADOPTING AND SWALLOWING what others have developed, abandoning our own quest for internal development, is a high-risk strategy for corporations and individuals.

Surely, we do adopt somewhat from others, but who are we and what do we have that can be built into distinctive value?