Should Buffett Sell Coca-Cola?

Warren Buffett owns about 9% of Coca-Cola, that’s 400 million shares, and famously it’s one of his favorite stocks. He made Cherry Coke the official drink of Berkshire Hathaway’s annual shareholder meeting and has been quoted saying that he’s about one-quarter Coca-Cola.

While Buffett’s love for Coca-Cola is pretty clear, it’s starting to seem like perhaps the octogenarian needs to put his love for the company aside and starts to focus on the profit— last year, shares fell about 1.7%, and in the last three months they’ve fallen 2%. 

While Coca-Cola used to be the popular choice for plenty of American’s, it seems the company is finding itself at a disadvantage with consumers changing their favorites. Consumption of carbonated soft drinks is the lowest its been in the United States since 1986, including diet soda.

While Coca-Cola was happy to jump on the bandwagon and begin selling bottled water, efforts have fallen short. In 2017, Coca-Cola’s sales are expected to drop 16%— from $41.6 billion to $35 billion.

Perhaps Coca-Cola’s slow decline in profit is why Buffett’s son, Howard, ended up parting with the company. At the same time it was announced that Howard Buffett was leaving, though, it was announced that current CEO Muhtar Kent announced his retirement.

While Coca-Cola profit is declining, there will be a new CEO taking the reigns— he could turn things around. Even if Buffett should sell, it isn’t like the Oracle to jump ship just because shares are at a low point.

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