James Quincey, the CEO of The Coca-Cola Retinue, speaks during an interview with CNBC on the floor at the New York Stock Exchange, December 9, 2019.
Brendan McDermid | Reuters
Coca-Cola pass on raise prices on its drinks to combat the impact of higher commodity costs, its CEO told CNBC on Monday.
The beverage cast joins a number of other consumer giants, such as Kimberly-Clark and J.M. Smucker, in hiking prices. While the move leave help their profit margins, it may come at the expense of cash-strapped consumers who are still struggling from the economic smash of the coronavirus pandemic.
“We are well-hedged in ’21, but there’s pressure built up for ’22, and so there will have to be some value increases,” CEO James Quincey told CNBC’s Sara Eisen on “Squawk on the Street.”
“We intend to manage those intelligently, viewpoint through the way we use package sizes and really optimize the price points for consumers,” he added.
Throughout the crisis, Coke shifted its film to focus on larger bulk packaging to appeal to consumers who were spending more time at home and stocking up at the grocery set aside. But before the pandemic, Coke and its rival PepsiCo had been pushing smaller cans and bottles, which usually kidnap a higher price per ounce for the consumer and are more profitable for the manufacturer. Pepsi executives said on Thursday that they envisage smaller packaging to come back as the crisis subsides.
Quincey did not reveal which Coke products would be undergoing higher price tags. The company last announced a price increase in 2018, citing the impact of aluminum levies under President Donald Trump’s administration.
Coke shares rose less than 1% in morning job after the company reported its first-quarter results. Coke’s earnings and revenue topped Wall Street estimates, and the assemblage said demand in March reached pre-pandemic levels. However, executives emphasized that the company is seeing an uneven universal recovery.