James Quincey, CEO of Coca-Cola Co., speaking on “Squawk Box” at WEF in Davos, Switzerland, January 18, 2023.
Adam Galica | CNBC
Inflation is moderating in most markets, following a period in which the beverage maker relied on price increases to generate higher revenue, Coca-Cola CEO James Quincey said Tuesday.
Coke reported fourth-quarter results Tuesday and said rising prices helped the company beat Wall Street estimates for quarterly sales. But Coca-Cola’s price rise has slowed from double-digit increases over the past two years.
Overall Coca-Cola prices rose 9% in the fourth quarter, but Quincey said that came from hyperinflation in markets like Argentina. In the majority of Coca-Cola’s markets, shoppers paid only about 3.5% more for their drinks than a year earlier.
“When you think about 95% of activity, 3.5% globally is close to what we were getting pre-Covid, before this spike in inflation,” Quincey said on “Squawk on the Street” CNBC.
The U.S. consumer price index rose 3.1% in January compared to the same period last year, according to U.S. Department of Labor data released Tuesday.
In July, Coke executives said the company was finished raising prices for 2023. Consumers in Europe and the United States had begun to shift to less private-label juice and bottled water. expensive instead of buying its Simply and Smartwater brands.
Quincey also said Tuesday that the American consumer has gone in two different directions. Those with higher disposable income buy Coca-Cola’s premium drinks, such as Fairlife milk, while those on a tighter budget cut back on spending and buy more economical packs.
As a result, Coca-Cola’s North American volume declined 1% during the quarter.
Shares of Coca-Cola fell less than 1% in morning trading.
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