Coca-Cola has encountered ‘accelerated cost pressures and ongoing supply challenges’
(Picture: Getty Images)Soft drink behemoth Coca-Cola has warned investors that consumer demand could slow in the face of rampant global inflation.
Coca-Cola admitted that it had experienced “accelerated cost pressures and ongoing supply challenges” that “continue across markets”. However, it “continues to raise the bar in integrated execution to deliver value to its customers and consumers in an inflationary environment.”
The drinks giant said in its first quarter results that it was shifting to affordable and refillable glass bottles in some markets where consumers are experiencing the biggest price pressure.
In India, the company is increasing its customer base by expanding affordable offerings. Coca-Cola has been experimenting with what it calls a “splash bar” that dishes out 100 to 300 ml beverages in small cups and also returnable glass bottles.
The manufacturer said: “The company and its bottling partners are investing in various partnerships in order to expand the collection infrastructure and increase recycling in many markets, including Australia, Brazil, Japan and Mexico, while also expanding our reusable packaging portfolio.
“Actions such as these help drive packaging circularity and support the company’s World Without Waste initiatives, including recyclability, virgin plastic reduction, reusable packaging and the company’s goal to collect and recycle a bottle or can for every one it sells by 2030.”
The US business, led by Brit James Quincey, has made a commitment to recycle a bottle or a can for every individual can or bottle it sells by 2030.
During the first quarter of this year, net revenues at Coca-Cola grew 16% to $10.5 billion (£8.3 billion) and revenues were boosted by 18%.
The company has made contributions and product donations totalling nearly $15 million (£11.2 billion) to provide urgent assistance to all its Ukraine-based employees.
Danni Hewson at AJ Bell said: “Coca-Cola delivered a masterclass in pricing power with its latest results beating expectations both in terms of revenue and profits.
“It’s been pretty fleet-of-foot when it comes to supply chain issues and has benefited from growing consumer freedoms as much of the world relaxes covid restrictions.
“But despite the fizz there was no boost to the outlook as the company carefully considers what the next few months might mean.”
