Food price storm will continue - Coke boss
May 14, 2008
High commodity and food prices were unlikely to calm down any time soon, Muhtar Kent, the president of Coca-Cola, said yesterday.
Prices were rising due to a "perfect storm" of conditions including countries diversifying to ethanol, growing demand from emerging companies and weather factors, Kent said. The conditions "are here to stay for some time".
"We will certainly make sure that we take every precautionary step to make sure that we keep growing," said Kent, who takes over as the US beverage giant's chief executive on July 1.
Food prices have risen rapidly this year, raising particular fears in the developing world. World Bank president Robert Zoellick has said 2 billion people across the world are struggling with high food prices, and 100 million people in poor countries may be pushed deeper into poverty.
Kent said Coca-Cola had been hit by higher prices for raw materials such as sugar and fructose, which is commonly made from maize.
The company would look to grow organically and through foreign acquisitions to offset stagnant demand in its home market. About 80 percent of its revenue was generated outside North America. "Our target is to have many more billion-dollar brands and enhance our current 13 brands," Kent said. But he did not expect the company to diversify into alcoholic drinks.
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