Despite raising its prices by 12 % on average, Coca-Cola is not seeing demand for soft drinks decline. Quite the contrary: volumes rose 4 % in the third quarter. The multinational behind Coca-Cola, Fanta and Sprite is now raising its full-year outlook.
Affordable options
The Coca-Cola Company has published rather successful third-quarter results: revenue rose 10 % to 11.1 billion dollars (roughly the same in euros), while net profit went up 2.8 % to 2.8 billion. That is better than what analysts had expected. Out-of-home consumption performed particularly strongly.
“Our strong capabilities and consumer insights continue to help us win in the market”, CEO James Quincey said. However, the soft drinks producer now does see the first signs of changing consumer behaviour, especially in Europe, with growth for discounters and private brands in categories such as water and fruit juice. The company will now focus its innovation efforts on packaging to offer more affordable options.
Strong brands
For the full financial year, Coca-Cola is raising expectations: the company is now targeting organic growth of 14 to 15 %, up from 12 to 13 % previously. For next year, the beverage company expects a further impact from global inflation, with volatile commodity prices.
Coca-Cola is not the only food multinational that continues to post strong results despite high inflation: industry peers PepsiCo and Nestlé also managed to raise prices last quarter without any negative impact on sales volumes. Consumers continue to buy strong brands even in times of crisis, the analysis says. However, Procter & Gamble, although active in near-food categories, already saw volumes fall slightly after sharp price increases.
