ANDINA BOTTLING CO INC Annual Report - How They Did This Year

I’ve put together this guide to help you understand how Andina Bottling Co. (Coca-Cola Andina) performed. My goal is to explain their business in plain English so you can decide if they belong in your portfolio.

1. What does this company do?

Think of Andina Bottling as the engine room for Coca-Cola in South America. They make and distribute drinks across Chile, Brazil, Argentina, and Paraguay, serving 55 million people. In 2025, they brought in Ch$2,150 billion in sales. While famous for Coke, they are diversifying. They now handle Monster energy drinks, Campari spirits, beer brands like Estrella Galicia, and even Mentos candy. They operate 11 bottling plants and 33 distribution centers, moving over 700 million cases of product every year.

2. The "Coca-Cola Connection"

Andina is a key partner to The Coca-Cola Company, which owns about 7.3% of the business. This is a double-edged sword. It gives them access to world-famous brands, but keeps them on a short leash. Their operating agreements—which dictate pricing and territory—expire between 2027 and 2028. Because these contracts are their lifeblood, renewing them is a critical milestone for the company’s future.

3. Financial Health & The "Currency Roller Coaster"

Because they report in Chilean pesos but earn money in other currencies, their profits swing based on exchange rates.

• The Cost Trap: They buy ingredients like plastic and aluminum in U.S. dollars. When local currencies drop against the dollar, their production costs spike. This squeezes their profit margins, which sat at about 13.5% in 2025.
• Spending Big: The company is investing heavily in its future. They spent Ch$277 billion in 2025 on new beer production lines, automated warehousing, and water-saving technology.

4. Strategic Shifts: Moving Beyond Soda

Andina is reducing its reliance on traditional soft drinks, which made up 64% of 2025 sales. They are pivoting toward:

• Alcohol & Beer: They are signing new distribution deals for beer and spirits. They now manufacture beer in Brazil to capture more of the "Total Beverage" market.
• Efficiency: They are upgrading their management software to track costs and inventory in real-time. They aim to cut administrative costs by 5% by 2027.
• Exits: They are streamlining their portfolio. In 2024, they sold their Brazilian dairy business to focus on higher-growth areas like energy drinks.

5. Real-World Risks to Watch

• Market Volatility: The Chilean stock market has lower daily trading volume than major U.S. exchanges, which can lead to more significant price swings for shares.
• Legal & Regulatory: Their Brazilian branch faces R$7.9 billion in legal disputes over taxes and labor. These represent a persistent management focus and a potential cash-flow risk.
• Environmental: Water is their primary ingredient. Droughts and climate change pose risks to production. In Chile, they face rising costs for water rights and potential production limits.

The Bottom Line for You

Andina is a massive, established operation, but it is a "high-maintenance" investment. You aren't just betting on soda; you are betting on South American economies and the company's ability to pivot into alcohol and snacks.

Before buying, ask yourself: Are you comfortable with a company whose profits depend on government policy, currency swings, and complex supply chains? This is an investment for those who want regional market exposure rather than steady, predictable growth.