James Quincey, CEO of The Coca-Cola Company, speaks on the New York Stock Exchange during an interview with CNBC on December 9, 2019.
Brendan McDermid | Reuters
Coke will raise prices on its beverages to counter the impact of higher raw material costs, the CEO told CNBC on Monday.
The beverage company joins a number of other consumer giants, as Kimberly-Clark and J. M. Smuckerin hiking prices. While the move will improve their profit margins, it could come at the expense of consumers, who are still suffering from the economic impact of the coronavirus pandemic.
“We intend to manage these intelligently, rethink the way we use package sizes and really optimize prices for consumers,” he added.
During the crisis, Coke relocated production to focus on larger bulk packaging to appeal to consumers who spent more time at home and stocked up in the grocery store. But before the pandemic, Cola and its rival PepsiCo had pushed smaller cans and bottles that usually have a higher price per ounce for the consumer and are more profitable for the manufacturer. Pepsi executives said Thursday they are expecting smaller packaging to come back as the crisis subsides.
Quincey did not disclose which cola products would have higher prices. The company last announced a price hike in 2018, citing the impact of aluminum tariffs under President Donald Trump’s administration.
Coke stocks rose less than 1% in morning trading after the company reported on the results of the first quarter. Coke’s profits and revenue surpassed Wall Street estimates, and the company said demand reached pre-pandemic levels in March. However, executives stressed that the company is recovering unevenly around the world.