Leveraged Growth - The Coca-cola Story

Leveraged Growth
Working Smart Not Working Hard

The

story

In 1885, Dr John Pemberton developed the now all famous Coca-cola, a carbonated drink. Both small town and big city dwellers enjoyed carbonated beverages at local soda fountain or ice cream salon. Often housed in drug stores, the soda fountain counter served as a meeting place for people of all ages. But…….this is limiting time, effort and location.

In August 1888, Asa Candler paid $2,300 in cash to buy over the rights of Coca-cola. Two young attorneys from Chattanooga believed they could build a business around bottling Coca-cola. In a meeting with Candler, they obtained the exclusive rights to bottle Coca-cola across most of the United States……. for the sum of $1. By 1909, nearly 400 Coca-cola bottling plants were operating.

By 1920, the ideas and zeal of the 2 young attorneys fueled steady growth. Six-bottle cartons were a huge hit in 1923 and by end of 1920s, bottle sales exceeded fountain sales. Before bottling people had to go to a local soda fountain to order a coke - or there is no coke. Bottling changed all that, consumer need not go to a soda fountain to enjoy a coke because they could buy a six-pack and bring the fountain home with them. It has created a world of convenience…this is leveraging of time, effort and location.

This is an example of leveraging growth on expanding sales without compromising on profits.