Thursday, February 10, 2011

Coke Around the World

Many American investors have been alarmed recently by stories that China's rapidly growing economy could surpass our own in the coming decades as the largest in the world. But it's important to keep in mind that economic growth is not a zero-sum game, and that an expanding global economy can have tremendous benefits for American companies.

Coca-Cola's fourth-quarter earnings report bears that out. Coke reported that its worldwide sales volume increased by 5 percent, but that growth was mainly fueled by a 12 percent increase in sales in India, and a whopping 31 percent increase in sales in Russia. All told, Coca-Cola's CEO estimates that sales growth in Brazil, India, China and Russia accounted for 40 percent of the company's new sales for the year.

Those four countries represent some of the fastest-growing economies on the planet. And as their economies grow, their citizens will be more and more able to buy American products, as they showed last quarter. And here in North America? Coke's North American sales growth for the fourth quarter amounted to just 3 percent.

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