Will Coca-Cola Save the World?
I recently read an article in Bloomberg BusinessWeek discussing Coca-Cola’s (NYSE: KO) strategy to win in emerging markets. I suddenly realized that like Clorox (NYSE: CLX) and Wal-Mart’s (NYSE: WMT) move into “green” products, Coca-Cola may be the sugar daddy needed to bring clean water (NYSE: PHO) to Third World countries.
Coke is plowing the unexpected profits from the sale of [the World Cup theme song] Wavin’ Flag downloads into its six-year, $30 million Replenish Africa Initiative, which seeks to provide clean water and better sanitation. The continent figures big in Coke’s long-term growth plans, where water scarcity is an immediate problem as well as a long-term threat to the company’s beverage production.
So, in order for Coke to expand, they need clean water. Thus, the company is making a long term investment to build the foundation for an incredible new market.
We can leave the philosophical questions to the academics and cause heads. But the way I see it, this is what it takes to finally address one of the most serious issues facing humankind. According to USAID, one-third of all humans will face severe or chronic water shortages by the year 2025. If a fraction of these future water drinkers end up drinking too much Coca-Cola, I think it’s a price worth paying.
If you are a Coke shareholder, in an extreme bout of cosmic irony you may actually help save the world.