James Quincey, CEO of Coca-Cola Co., speaks about “Squawk Box” at the WEF in Davos, Switzerland, on January 18, 2023.
Adam Galica | CNBC
Inflation is moderating in most markets after the beverage maker spent a period of time betting on price hikes to drive higher revenue, Coca-Cola CEO James Quincey said on Tuesday.
Coke reported its fourth-quarter results on Tuesday and said higher prices helped the company beat Wall Street estimates for its quarterly revenue. However, Coca-Cola’s price increases have slowed compared to the double-digit increases of the past two years.
Overall prices for Coca-Cola rose 9% in the fourth quarter, but Quincey said that was due to hyperinflation in markets such as Argentina. In most Coca-Cola stores, shoppers only paid about 3.5% more for their drinks than last year.
“If you think about 95% of the business, 3.5% on a global basis is about what we were at before Covid, before this spike in inflation,” Quincey said on CNBC’s “Squawk on the Street.”
The U.S. consumer price index rose 3.1% in January compared with the same period last year, according to U.S. Labor Department data released on Tuesday.
In July, Coca-Cola executives said the company was ready to raise prices in 2023. Consumers in Europe and the US have started switching to cheaper own-brand juices and mineral water instead of buying the Simply and Smartwater brands.
Quincey also said Tuesday that the U.S. consumer has gone in two different directions. Those with higher disposable income are buying Coca-Cola’s premium drinks, such as Fairlife milk, while those on a tighter budget are cutting back on spending and buying more value packs.
As a result, Coca-Cola’s North American volume fell 1% in the quarter.
Shares of Coca-Cola fell less than 1% in morning trading.
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