Shares in beverage bottler Coca-Cola Amatil Ltd (ASX: CCL) traded flat today after the company provided a business update at its annual general meeting.

The stock has dropped around 38 per cent over the past three years versus a 4.8% return for the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO). This is largely because between 2012 and 2014 the group delivered falling sales and earnings per share, which was an outcome the company blamed on competition and a tough operating environment. However, management’s strategy also deserves its fair share of responsibility alongside some aggressive pricing that may now belong to days gone by.

In March 2014 Alison Watkins was appointed as the new CEO and set about clearing out some of the past management team and launching a substantial cost cutting program. The result was a return to earnings growth in financial year 2015, but after nearly $100 million of cost savings has Coca-Cola Amatil got what it takes to now return to consistent long-term earnings growth?

Today the company confirmed its forecast for mid-single-digit earnings per share growth in the current financial year, with the pace of the recovery dependent on revenue initiatives in Australia and the growth of the Indonesian market.

Indonesia is commonly touted as the earnings growth driver for Coca-Cola Amatil, although it has disappointed so far as cultural differences and economic realities prove hard to surmount. Recently, Coca-Cola Amatil’s parent company invested US$500 million into the region to try and jumpstart growth, although the jury’s out on whether it will succeed as expected.

The core Australian market has also underperformed due to what some claim is a structural shift as the Instagram generation of younger Australians shun Coca-Cola in favour of healthier alternatives.

There is probably some truth in this and recently the UK government went as far as to introduce a “sugar tax” on products like Coca-Cola that contain high amounts of sugar. It would not be a surprise to see Australian politicians look to jump on this revenue earner over time either.

In response to the headwinds, Coca-Cola is looking to diversify away its leverage to sugary drinks with more retailing of bottled water, coffee, and alcoholic drinks. It is the business behind bottled water brands like Mount Franklin, Peat’s Ridge and Zico Ridge Coconut water.

Bottled water in Australia is famously expensive compared to the rest of the world and may also face some headwinds due to the younger generation’s perception that the plastic packaging is bad for the environment. While others may yet wake up to the fact that water comes out of taps for pretty much free.

However, Coca-Cola remains one of the world’s most powerful brands and the Australian bottler retains a strong balance sheet while paying an attractive partially franked dividend in the region of 4.9% based on current valuations.

Selling for $8.98 the stock trades on nearly 17x analysts’ estimates for earnings per share in the region of 54 cents over FY16. This partly reflects its strong cash flows and handy dividend in today’s low cash rate world, although at this valuation it will need to deliver on earnings growth beyond just cost cutting.

Questions remain over whether it can achieve long-term sales growth in the face of changing consumer preferences in Australia and an Indonesian market that may not deliver the double-digit growth expected by the company and investors.

Coca-Cola’s modest long-term growth outlook means its shares aren’t my cup of tea.

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Motley Fool contributor Tom Richardson has no position in any stocks mentioned.

You can find Tom on Twitter @tommyr345

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.