Coca-Cola just reported a rise in profit of 18 percent, rendering their profit margin to $2.8bn in the second quarter, as compared to last year. The demand from China for the beverage went up to 24 percent. Sales of the carbonated beverage also escalated somewhat in Europe.
At the same time however, what might be a tad surprising (and disappointing) to Coca-Cola consumers, is the fact that according to a recent BBC news article, the company is planning on elevating prices on its drinks “to reflect higher costs” it has been incurring. Fanta and Sprite will also be included in this price change that will result in a 3 to 4 percent addition.
Coca-Cola Growth Targets
More good news for Coca-Cola came in a statement from Muhtar Kent, the company’s Chairman and Chief Executive. He said that the company’s results were “well ahead of [its] long-term growth targets.” He added that the company was “delivering these strong results at a time when global macroeconomic conditions are at best mixed.” This is great news for the company.
North American sales of Coca-Cola have dropped somewhat, possibly since the predictions for “US consumer demand remains uncertain amid a weak labor market.” Further, volatility encountered in commodity markets has been seen as a possible reason for the continuation of increasing prices for both packaging and sweeteners. Coca-Cola thus feels its own pricing must reflect this.