James Quincey, CEO of Coca-Cola Co., speaking on “Squawk Box” at the WEF in Davos, Switzerland, on Jan. 18, 2023.
Adam Galica | CNBC
Inflation is moderating in most markets, after a stretch in which the beverage maker relied on price hikes to drive higher revenue, Coca-Cola CEO James Quincey said Tuesday.
Coke reported its fourth-quarter results Tuesday, and said higher prices helped the company beat Wall Street’s estimates for its quarterly sales. But Coke’s price hikes have slowed from the last two years’ double-digit increases.
Coke’s overall prices were up 9% in the fourth quarter, but Quincey said that came from hyperinflation in markets such as Argentina. In the majority of Coke’s markets, shoppers were only paying about 3.5% more for their drinks than they were a year earlier.
“When you think about 95% of the business, 3.5% on a global basis is close to what we were getting prior to Covid, prior to this inflation spike,” Quincey said on CNBC’s “Squawk on the Street.”
The U.S. consumer price index was up 3.1% in January compared with the year-ago period, according to U.S. Department of Labor data released Tuesday.
In July, Coke executives said the company was done raising prices for 2023. Consumers in Europe and the U.S. had started switching to cheaper private-label juices and bottled water instead of buying its Simply and Smartwater brands.
Quincey also said Tuesday that the U.S. consumer has gone in two different directions. Those with more disposable income are buying Coke’s premium drinks, such as Fairlife milk, while those with tighter budgets are pulling back their spending and buying more value packs.
Coke’s North American volume shrank 1% in the quarter as a result.
Shares of Coke fell less than 1% in morning trading.
Don’t miss these stories from CNBC PRO: