BENGALURU: Coca-Cola Co said on Tuesday it would raise soda prices further in 2023 to combat stubbornly high costs, in sharp contrast to a halt at rival PepsiCo Inc, as the beverage giants bet on different paths to boost sales for the year.
Coca-Cola also forecast annual profit growth above Wall Street expectations, while PepsiCo had delivered a more somber forecast last week.
A near duopoly in the global carbonated drinks market has made it relatively easy for the companies to undertake multiple cost inflation-induced price hikes over the last year without demand drying up.
Coca-Cola Chief Executive James Quincey said the company would continue raising prices “across the world” this year, but at a moderating pace.
Analysts said Coca-Cola’s brand strength gives it the power to set prices in its category at levels above competitors.
“(Coca-Cola) would certainly be a price leader in carbonated soft drinks. They have the capacity to take pricing,” Wedbush Securities analyst Gerald Pascarelli said.
He added Coca-Cola’s strategy last year of relying less on price increases to drive sales compared to its main rival also gives it more room to raise rates without losing competitiveness.
Coca-Cola’s average selling price rose 11% for the full year ended Dec. 31, while PepsiCo’s increased 14%.
Unit case volumes for Coca-Cola fell 1% in the quarter, hit by a drop in demand in Europe, where higher fuel and power costs have sparked a cost-of-living crisis.
Quincey said consumer demand in the region is likely to remain weak for the rest of 2023.
Coca-Cola forecast annual adjusted earnings per share to rise 4% to 5%, above estimates of 3% growth, according to Refinitiv IBES data.
Adjusted fourth-quarter profit came in line at 45 cents per share, the first time in three years the company failed to beat expectations.
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