Category: General Blogs
Warren Buffett made headlines late last month with comments he made at the Berkshire Hathaway Inc. annual meeting in Omaha, Neb.
“Buffett Says Happiness From Coca-Cola Beats Broccoli Benefit,” the Bloomberg headline blared.
Buffett, the chairman and CEO of Berkshire Hathaway, has millions of reasons to derive happiness from Coca-Cola. Berkshire reportedly owns 400 million shares of Coke, about 9 percent of the company, making it the largest single shareholder. From a purely investment point of view, Coca-Cola is doing just fine, generally out-performing the overall stock market in recent quarters, providing Buffett even more context for his happiness.
But at the meeting, Buffet, 85, found himself defending Coca-Cola against criticism that sugary drinks are the cause of the nation’s obesity problems. And he did it in his usual simple, straightforward way. “I elect to get my 2,600 or 2,700 calories a day from things that make me feel good when I eat them. That is my sole test. I like fudge a lot. Peanut brittle. I am a very, very, very happy guy. I have not seen evidence that convinces me that I’ll be more likely I reach 100 if I suddenly switched to water and broccoli.”
He added it seemed "spurious" to argue that calories from Coke alone were a significant factor in obesity levels, CNBC reported.
The Buffett stories came as we were putting this issue to bed and provided a touch point for the features we were preparing. This issue features the Beverage Almanac: The State of the Beverage Market, our annual “beverage world by the numbers” report. Over the last dozen of years or so, this report has shown the relative decline of carbonated soft drinks as consumers have switched to less sugary alternatives like bottled water.
The cover feature, “Making soda cool again,” written by Managing Editor Andrew Kaplan, leads off the Almanac coverage. It provides an analytical context for how marketers of carbonated soft drinks—starting with Coke and Pepsi—are reinventing themselves in the face of the headwinds they are experiencing.
In the feature, Andrew chronicles that marketers are in the midst of trying to reverse decades of their own tactics to pump up the volume by making CSDs ubiquitous and cheap. Now marketers are more focused on making them special and premium primarily to appeal to the millennial generation, who haven’t grown up with a “Coke and a Smile.”
The millennial generation also is not he “supersize me” generation, so we are more likely to see sodas in single-digit-ounce bottles and cans. As such marketers can focus more premiumization and profitability by selling the smaller sizes at higher per-ounce rates.
So while Buffett hoisted a 20-ounce soda to punctuate his comments last month, most of us will derive our happiness from smaller containers.