Wednesday, December 28, 2005

Warren Buffett Musings on Coke

- The chance that Coke is not the leader in the carbonated beverage business in the future is very small

- Candy bars become very entrenched in their markets and are hard to unseat...they don't travel well into new markets

- Coke travels well into new markets

- One of the most important thing about Coke as a consumer product is that Coke does not have a "taste memory." In other words, the taste of Coke doesn't accumulate in your mouth. This is what makes it easy for some people to have 3,4,5+ Cokes each day. They never tire of it because there is no taste residue. Orange or grape soda accumulates and you get sick of it. Same thing with chocolate. There is no diminishing marginal utility of taste for Coke. WB doesn't believe there has ever been a word written about this phenomenon.

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