.

             External Business Environment.

             Coke has been very aggressive globally, acquiring brands in markets like Russia, Bulgaria, and Kenya. It has also aggressively marketed and slightly altered the formula of its basic Coke brand to fit local tastes. As nations become wealthier, consumers tend to buy more packaged foods and drinks. This bodes well for Coke. It should come as little surprise that Coke"s sales are growing much faster in these foreign markets than in the U.S. In recent quarters developed markets like Germany in the U.S. have seen slow sales growth or, in some cases, outright sales declines. However, internationally case volumes jumped a solid +2 to +4%, led by such markets as Russia, China, and Brazil.

             Trends and Developments       .

             Coke is the world's largest soft drinks maker, saw its domestic market share drop by 0.9 percent to 43.1 percent last year. Revenue increased to $5.27 billion, up 4 percent from $5.08 billion in the same period a year earlier, and beating analysts' forecasts of $5.17 billion. Coca-Cola also announced plans to repurchase $2 billion shares of stock during 2005. .

             Coca-Cola's best sales performance last quarter, as measured by unit case volume growth, was clearly in its international markets, including double-digit percentage growth in both China and Brazil. Unit case volume grew 7 percent in Argentina and 12 percent in South Africa. .

             However, total volume growth was flat in North America, the company's largest and most vital market. According to the company, the decline in carbonated soft drink case volume in the market was offset in part by strong growth in diet, water, and juice offerings. .

             Experts admit that Coke is very strong in carbonated soft drinks, but the growth is on the non-carbonated side.

             Overall, U.S. carbonated soft drink volume grew only 1 percent in 2004, driven by diet carbonated soft drinks and energy drinks. .

             Coke's other beverage rollouts this year include a lime-flavored version of the flagship Coca-Cola brand and an energy drink called Full Throttle.