Coke CEO: Economy Still Dragging, Middle Class Remains Concerned

The chief executive at Coca-Cola, one of the world's largest marketers, bluntly said Tuesday that the economy continues to drag in many countries, including the U.S., and the struggles extend beyond low-income individuals.

"The economic recovery is weak here in the United States as well as in Europe, Japan and across most of the developed Western world," said CEO Muhtar Kent. "Many middle-class consumers, especially those in developed economies, are still feeling somewhat confused and fragile."

The trend is different in some emerging markets, he said, such as Latin America, India and China.

Moving forward, as more individuals move to cities and earn more, Kent indicated that Coke is well-positioned to capitalize. Coke will continue to invest in brand-building and other initiatives in North America and other developed regions, Kent said on a call with investors.

In the second quarter, partly due to the economy, organic sales in the core sparkling beverage category, which includes the flagship brands, declined 1% in North America.

A standout, however, continued to be Coke Zero, with 12% volume growth propelled by effective marketing, the company said. Fanta had 7% growth.

Coke is gearing up for an extensive promotional effort for the 2012 London Olympics that will employ eight U.S. athletes -- notably Alex Morgan, who received a degree of stardom Sunday as she scored the first goal for the U.S. team in the Women's World Cup.



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