KO: Coca-Cola is an Investing Knockout

02.01.2017 • Emerging Markets

Federico Tessore – Investor Passport (ARG)

It would be easier to find a needle in a haystack than to find someone who hasn’t heard about the world’s most famous soft drink company.

An amazing 94% of people all over the world can identify the brand of soft drink I’m talking about.

It’s the second most recognized term in the in the world after the word “OK”.

OK, so how did Coca-Cola grow into the giant it is today?

It all began when a pharmacist named John Styth Pemberton discovered the magic formula for success on May 5, 1886 in Atlanta.

Pemberton called the beverage that he created in his backyard “Pemberton’s French Wine Coca-invigorating tonic,” and he patented it as a drug. The medicinal wine contained cocaine extracted from the coca leaf. Pemberton’s assistant could tell the exact composition of the beverage – how much cocaine it contained – by just smelling it. Initially, the tonic was recommended for headaches and hangovers. It sold for five cents and came in used beer bottles. They sold 100 liters of the tonic in the first year it was on the market – nothing compared to the 1.9 billion cans of Coca-Cola sold daily all over the world today.

The following year, Pemberton took the wine out of his tonic and added caffeine and cola nut extract to give it flavor. His accountant and partner, Frank Robinson, came up with the name “Coca–Cola”. In 1891, Pemberton would sell the formula for a mere $2,300 dollars to Asa Candler, who marketed and sold Coca-Cola outside of Georgia.

In 1892, Candler created The Coca-Cola Company with an initial capital investment of $100,000. They decided to remove cocaine from the formula in 1903, but they kept the flavor the same by using a preparation made from coca leaves, from which cocaine had already been extracted. That’s how coca and cola became the basic ingredients of a beverage drunk all over the world.

Candler sold the company in 1919 to Ernest Woodruff for nothing less than $25 million dollars.

The company created the can in 1945 so they could send Coca-Cola to soldiers during World War II.

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