Coca-Cola CEO James Quincey has indicated that prices of Coca-Cola products will rise due to higher commodity costs. 

In an interview on CNBC’s ‘Squark on the Street’ the Coca-Cola CEO maps out how the company will manage increasing cost pressures which could affect the day to day of running of the business. 

More signs of inflation.

Quincey goes on to say: “We are well-hedged in ’21, but there’s pressure built up for ’22, and so there will have to be some price increases,”

Many argue that due to central banks simply flooding the financial markets with trillions upon trillions in quantitative easing programmes (aka printing money), this is now trickling through the system into higher commodity prices. 

These costs are now eating away at Coca-Cola’s profit margins. 

It seems that these costs will now inevitably be passed onto the consumer, where many are still suffering financially due to government restrictions and ongoing lockdowns. 

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Coca-Cola packaging.

Looking at commodity prices Quincey adds: 

“We intend to manage those intelligently, thinking through the way we use package sizes and really optimize the price points for consumers,”

Although the beverage company CEO did not reveal exactly which products within the range might rise in price, it seems that overall the price hikes are in line with global inflationary pressures. 

Coca-Cola higher commodity costs
Image by BelgPix from Pixabay

Coca-Cola higher commodity prices.

These pressures include the costs of high-fructose corn syrup, various metals and a wide range of packaging materials that are essential to the production of Coca-Cola’s extensive range of products. 

In the U.S. prices of Coke products have previously risen party due to former President Trump’s aluminium tariffs. 

Is this another clear signal that food/beverage inflation in supermarkets and hospitality is here? 

The recent announcements from Coca-Cola’s CEO indicate that these price hikes could continue into 2022 and beyond. 

Historically gold and silver have been a hedge against inflation. Read more about inflation here.

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