Risk factor changes · KO

What changed in Coca-Cola's risk factors

Item 1A (Risk Factors) of Coca-Cola's FY2025 10-K compared with its FY2024 10-K, sentence by sentence.

Newer: 10-K filed 2026-02-20 · Older: 10-K filed 2025-02-20

New in the latest 10-K 12

• Recent activities and proposals by U.S. federal and state government agencies and initiatives have focused on potential drivers behind the rise in childhood chronic diseases.
• The increasing use of data analytics, automation and artificial intelligence across digital platforms is further reshaping how consumers discover, evaluate and engage with brands.
• We, our bottling partners or contract manufacturers have recalled, and could in the future recall, products due to product quality or safety issues, including actual or alleged mislabeling, misbranding, spoilage, undeclared allergens, contamination or adulteration by any means, or failure to meet applicable regulatory requirements.
• A widespread product recall could result in significant losses due to the costs of a recall and the destruction of product inventory.
• If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
• For the year ended December 31, 2025, one bottler accounted for 10% of our net operating revenues, which are reflected in our EMEA and Asia Pacific operating segments.
• Further, actions by our bottling partners, including related to product quality, safety, marketing practices, labor relations, regulatory compliance, sustainability, or other matters could adversely affect the reputation, consumer perception, or value of our brands, even if we are not directly responsible for such actions.
• RISKS RELATED TO REGULATORY AND LEGAL MATTERS Increases in income tax rates, changes in income tax laws or regulations, or unfavorable resolutions of tax matters could have a material adverse impact on our financial results.
• In June 2025, the Group of Seven ( G7 ) released a statement announcing an understanding of a potential side-by-side system approach to the Pillar Two framework that would exclude U.S.-parented groups from certain Pillar Two provisions in recognition of existing U.S. minimum tax rules.
• In January 2026, the OECD issued further administrative guidance introducing a side-by-side framework under Pillar Two, largely exempting U.S.-headquartered companies from the application of Pillar Two.
• Failure to adequately protect, or disputes relating to, trademarks, formulas and other intellectual property rights could harm our business.
• If interest rates increase, our net income could be negatively affected.

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Removed words are struck through; added words are highlighted.

• Many of the jurisdictions in which our products are sold have experienced, and could continue to experience, unfavorable changes in economic conditions, which could negatively affect the affordability of, and consumer demand for, our beverages, and certain markets in which our products are sold experienced intensified high rates of inflation throughout 2024, 2025, which may continue in 2025. 2026.
• Throughout 2024, 2025, the Company faced disruption to our operations due to international conflicts, including the conflict between Russia and Ukraine and conflicts in the Middle East. conflicts.
• Restrictions on our ability to transfer earnings or capital across borders; price controls; limitations on profits; the negotiation of new trade agreements; new, expanded or retaliatory tariffs; tariffs, including tariffs that increase suppliers sourcing costs; import authorization requirements; and other restrictions on business activities, which have been or may be imposed or expanded as a result of political and economic instability, deterioration of economic relations between countries or otherwise, could impact our profitability.
• The success of our innovation activities depends on on, among other factors, our ability to correctly anticipate customer and consumer acceptance and trends; obtain, maintain and enforce necessary intellectual property rights; and avoid infringing on the intellectual property rights of others.
• Changes in the retail landscape or the loss of key retail or foodservice customers could adversely affect our financial results.
• The In addition, our success depends in part on our ability to maintain good relationships with key customers.The loss of one or more of our key retail or foodservice customers could have an adverse effect on our financial performance.
• Some of the actions we may take from time to time in pursuing these opportunities may become a distraction for our managers and employees and may disrupt our ongoing business operations; cause deterioration in employee morale, which may make it more difficult for us to retain or attract qualified managers and employees; disrupt or weaken the internal control structures of the affected business operations; and give rise to 13 negative publicity, which could affect our corporate reputation.
• If we are unable to successfully manage the potential negative consequences of our productivity initiatives, our business operations could be adversely affected. 13 If we are unable to attract, retain and inspire outstanding talent, our business could be negatively affected.
• The success of our business depends on our Company s and the Coca-Cola system s ability to attract, hire, develop, motivate and retain and inspire a global workforce of top outstanding talent with diverse perspectives, experiences and backgrounds that reflect the broad range of consumers and markets we serve around the world; and in our ability to nurture a culture that supports our growth and aligns employees around the Company s purpose and work that matters most.
• Failure to attract, hire, develop, motivate and retain specialized and/or top talent with diverse perspectives, experiences and backgrounds that reflect the broad range of consumers and markets we serve around the world; inspire outstanding talent; to develop and implement an adequate succession plan for our management team; to maintain a corporate culture that fosters innovation, collaboration and inclusion; or to design and successfully implement work models that meet the expectations of employees and prospective employees could disrupt our operations and adversely affect our business and our future success.
• Some of the raw materials and supplies used in the production of our products are available from a limited number of suppliers suppliers, or from a sole supplier supplier, or are in short supply when seasonal demand is at its peak.
• In addition, adverse and extreme weather conditions may affect the supply of agricultural commodities from which key ingredients for our products are derived. derived and manufactured.
• Any sustained or significant disruption to the manufacturing or sourcing of products or materials could increase our costs and interrupt product supply, which could adversely impact our business.
• The raw materials and other supplies, including ingredients, agricultural commodities, energy, fuel, packaging materials, transportation, labor and other supply chain inputs that we use used for the production and distribution of our products, are subject to price volatility and fluctuations in availability caused by many factors.
• These factors include changes in supply and demand; supplier capacity constraints; a deterioration of our or our bottling partners relationships with suppliers; international conflicts; political uncertainties; acts of terrorism; governmental instability; inflation; weather conditions (including the effects of climate change); hurricanes, wildfires, floods, droughts and other natural disasters; disease or pests (including the impact of citrus greening disease on the citrus industry); agricultural uncertainty; health epidemics, pandemics or other contagious outbreaks; cattle disease outbreaks (including avian flu); labor shortages, strikes or work stoppages; changes in or the enactment of new laws and regulations; governmental actions or controls or import/export restrictions, such as new, expanded or retaliatory tariffs, including tariffs that increase suppliers sourcing costs, sanctions, quotas or trade barriers; port congestion or delays; transport capacity constraints; cybersecurity incidents or other disruptions; or fluctuations in foreign currency exchange rates.
• Many of our raw materials and supplies are purchased in the open market, and the prices we pay for such items are subject to fluctuation.
• We expect the inflationary pressures on certain input and other costs to continue to impact our business in 2025. 2026.
• To the extent 14 that price increases are not sufficient to offset higher costs adequately or in a timely manner, and/or if they result in significant decreases in sales volume, our financial condition or results of operations may be adversely affected.
• Furthermore, we may not be able to offset cost increases through productivity initiatives or through our commodity hedging activity. 14 If we do not successfully integrate and manage our acquired businesses, brands or bottling operations, or if we are unable to realize a significant portion of the anticipated benefits of our joint ventures or strategic relationships, our financial results could suffer.
• If these 15 labor relations are not effectively managed at the local level, they could escalate in the form of corporate campaigns supported by the labor organizations and could negatively affect our Company s overall reputation and brand image, which in turn could have a negative impact on our products acceptance by consumers. 15 RISKS RELATED TO CONSUMER DEMAND FOR OUR PRODUCTS Obesity and other health-related concerns may reduce demand for some of our products.
• There is ongoing concern among consumers, public health professionals and government agencies about the health problems associated with obesity and other chronic diseases.
• Ongoing Continued governmental focus on such initiatives, as well as ongoing public concern about obesity; other health-related public concerns surrounding consumption of sweetened beverages; the effects or perceived effects of the usage of weight-loss drugs on consumption patterns; potential new or increased taxes on sweetened beverages by government entities to reduce consumption or to raise revenue; potential new or increased governmental regulations on particular ingredients or additives in our beverages and packaging, or on manufacturing processes; additional governmental regulations concerning the advertising, marketing, labeling, packaging or sale of our sweetened beverages; changes in funding for or restrictions on the inclusion of our products in benefit programs, such as the Supplemental Nutrition Assistance Program (SNAP) in the United States and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sweetened beverages may reduce demand for, or increase the cost of, our sweetened beverages, which could adversely affect our profitability.
• Consumer product preferences have evolved and continue to evolve as a result of, among other things, health, wellness and nutrition considerations, including concerns regarding caloric intake associated with sweetened beverages and the perceived undesirability of artificial processed foods and ingredients or processing; and artificial ingredients; concerns regarding the perceived health effects of, or location of origin of, ingredients, raw materials or substances in our products or packaging, including due to the results of third-party studies (whether or not scientifically valid); shifting consumer demographics; changes in consumer tastes and needs coupled with a rapid expansion of beverage options and delivery methods; affordability and changes in consumer lifestyles; lifestyles and spending patterns; concerns regarding the environmental, social and sustainability impact of ingredient sources, the product manufacturing process and our packaging; consumer emphasis on transparency related to ingredients we use in our products and collection and recyclability of, and amount of recycled content contained in, our packaging containers and other materials; concerns about the health and welfare of animals in our dairy supply chain; and competitive product and pricing pressures.
• However, despite our strong commitment to product safety and quality, we or we, our bottling partners or contract manufacturers at times have not met, and may not always meet, these standards, particularly including as we expand our product offerings through innovation or acquisitions into beverage categories, such as value-added dairy and plant-based beverages, that are beyond our traditional range of beverage products. acquisitions.
• In addition, we or our bottling partners or contract manufacturers and products have been, and could continue to be, subject to inspection by federal, state and local authorities, which could result in the identification of product quality or safety issues.
• A widespread product recall could result or any decrease in significant losses production resulting from remediation efforts due to the costs of a recall, the destruction of product inventory, and quality or safety issues may also lead to lost sales due to the unavailability of product for a period of time, and could also subject us to product liability claims and claims, negative publicity, publicity or changes in consumer demand, all of which could cause our business to suffer.
• Public debate and concern about perceived negative health consequences of processing and of certain ingredients in our beverage products, such as synthetic colors, nutritive (e.g., sugar, HFCS) and non-nutritive sweeteners, biotechnology-derived substances and other additives; substances that are present in our beverage products naturally or that occur as a result of the manufacturing process, such as 4-methylimidazole (4-MEI), a chemical compound that is formed during the manufacturing of 16 certain types of caramel coloring used in cola-flavored beverages; or substances used in packaging materials, such as bisphenol A (BPA), an odorless, tasteless food-grade chemical commonly used in the food and beverage industries as a component in the coating of the interior of cans, may affect consumers preferences and cause them to shift away from some of our beverage 16 products.
• Such risks may be increased if government officials make public statements about alleged risks purportedly associated with processing, particular ingredients used in our products, products or unintentional contaminants that may be present in the food or water supply.
• However, our continuing investment in advertising and marketing and our strong commitment to product safety and quality and respecting human rights have not always had, and may not in the future always have, the desired impact on our products brand image and on consumer preferences.
• In addition, if we fail to respect our employees and our supply chain workers human rights, or inadvertently discriminate against any group of employees or hiring prospects, we could face legal 17 risks and/or our ability to hire and retain the best talent will be diminished, which could have an adverse impact on our overall business. 17 If we are unable to successfully manage new product launches, our business and financial results could be adversely affected.
• For instance, the Company has directly entered the alcohol beverage category in numerous markets outside the United States, and in the United States, the Company has established a wholly owned, indirect, firewalled subsidiary, which uses third-party manufacturers and distributors to produce produce, distribute and sell alcohol products in certain regions of the United States and also authorizes alcohol-licensed third parties to use certain of our trademarks and related intellectual property on alcohol beverages that contain Company beverage bases.
• A deterioration of the financial condition or results of operations of one or more of our major bottling partners could adversely affect our net operating revenues from sales of concentrates and syrups; and, if such deterioration involves one or more of our equity method investee bottling partners, it could also result in a decrease in our equity income and/or impairments of our equity method investments. 18 We may from time to time engage in refranchising activities or divestitures of certain brands or businesses, which could adversely affect our business and results of operations.
• These divestitures may adversely impact our business, results of operations, cash flows and financial condition if we are unable to offset impacts from the loss of revenue associated with the divested brands or businesses, or if we are otherwise unable to achieve the anticipated benefits or cost savings from such divestitures. 18 RISKS RELATED TO REGULATORY AND LEGAL MATTERS Increases in income tax rates, changes in income tax laws or regulations, or unfavorable resolutions of tax matters could have a material adverse impact on our financial results.
• While the OECD issued draft language for the international implementation of Pillar One in October 2023, both the substantive rules and implementation process remain under discussion at the OECD OECD, so the timetable for any implementation remains uncertain.
• In December 2021, the OECD issued Pillar Two model rules rules, which would establish a global per-country minimum tax of 15%, and the European Union has approved a directive requiring member states to incorporate similar provisions into their respective domestic laws.
• Numerous countries have enacted legislation that implemented certain aspects of Pillar Two effective January 1, 2024, while many others have indicated their intent to adopt, or have adopted, adopted legislation that became effective in 2025. 2025, while additional jurisdictions may enact similar legislation in the future.
• The OECD and implementing countries are expected to continue to make further revisions to their legislation and release additional guidance. guidance intended to adopt this side-by-side framework into law in each of the member countries.
• On November 8, 2023, the Tax Court issued a supplemental opinion (together with the original Tax Court opinion, Opinions ) also siding with the IRS as to the validity of the blocked-income regulations and their application to the Brazilian legal 19 restrictions.
• Congress considered imposing a federal excise tax on beverages sweetened with sugar, HFCS or other 19 nutritive sweeteners and may consider similar proposals in the future.
• Consumers increased ongoing concerns and changing attitudes about solid waste streams and environmental responsibility and the related publicity could result in the adoption of additional such legislation or regulations in the future.

Removed since the previous 10-K 8

• In addition, our success depends in part on our ability to maintain good relationships with key retail and foodservice customers.
• If we are unable to attract or retain specialized talent or top talent with diverse perspectives, experiences and backgrounds that reflect the broad range of consumers and markets we serve around the world, our business could be negatively affected.
• Furthermore, we may not be able to offset cost increases through productivity initiatives or through our commodity hedging activity.
• RISKS RELATED TO CONSUMER DEMAND FOR OUR PRODUCTS Obesity and other health-related concerns may reduce demand for some of our products.
• We and our bottling partners have had, and may in the future need, to recall products if they become contaminated or adulterated by any means, or if they are mislabeled or do not meet applicable regulatory requirements.
• We may from time to time engage in refranchising activities or divestitures of certain brands or businesses, which could adversely affect our business and results of operations.
• Litigation or legal proceedings could expose us to significant liabilities and damage our reputation.
• Increased demand for food products, decreased agricultural productivity and increased regulation of ingredient sourcing due diligence may negatively affect our business.

Source: SEC EDGAR filings, compared sentence by sentence by EdgarStack. Sentence matching is automated and may pair or split passages imperfectly; check the linked filings before relying on any passage. A software tool, not financial advice. Not affiliated with the U.S. Securities and Exchange Commission.