Coca-Cola Stock (NYSE:KO)
Coca-Cola (NYSE:KO) continues to adapt under CEO James Quincey. The firm, headquartered in Atlanta, has reduced the number of brands in its portfolio from 400 to 200. At the same time, it has increased its focus on scaled global investments to deliver “beverages for life” across various dayparts and categories. Evercore ISI believes that the beverage giant’s next significant move may be to extend its footprint in the alcohol industry. This comes after the beverage giant successfully acquired Costa Coffee for $4.9 billion in 2018 and BodyArmor for $5.6 billion in 2021.
Analyst Robert Ottenstein observed that the alcohol space is a clear area that would assist Coca-Cola stock in driving its goal of doubling the number of customers over the next ten years and reaching its top-line goal of 4% to 6% growth. These objectives are related to the company’s goal of expanding its revenue.
Through the formation of many significant collaborations in the United States over the last two years, Coca-Cola has already boosted its exposure to the alcohol industry. Deals include Topo Chico Hard Seltzer and Simple Spiked with Molson Coors (TAP), Fresca Mixed with Constella Brands (STZ), and Jack and Coke with Brown-Forman. Fresca Mixed and Jack and Coke are made by Constella Brands (BF.A).
Evercore anticipates that Coca-Cola will participate even more actively in the alcoholic space in the future because consumer interest in alcoholic RTDs will provide the company with a clear opening, digital B2B technologies will pave the way for better execution, and new bottler arrangements will make the complexities of new ventures easier to manage.
The business also said that Coca-Cola stock is not the only non-alcoholic brand blurring the borders between conventional soda, water, tea, and alcoholic beverages. This was another point that was brought up by the corporation. PepsiCo (PEP) and Boston Beer (SAM) introduced Hard Mountain Dew during the previous year. The Vita Coco Company (COCO) announced a collaboration with Diageo (DEO) to introduce Vita Coco Spiked with Captain Morgan in the early years of the twenty-second century.
Although Coca-Cola has outpaced the general market in 2022, the author of Pearl Gray Equity & Research on Seeking Alpha thinks that the company’s relatively high valuation multiples are not caused for concern.
Featured Image: Pexels @ Radu Daniel ( MRD )
Author Shariq Khan 
