Coca-Cola Co said on Tuesday 14 February 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 31 December, 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.
Coca-Cola's shares fell marginally on Tuesday 14 February.
Coca-Cola HBC's Annual Profit Beats, Warns Of Price Increases
The above news followed news that Coca-Cola HBC AG on Tuesday 14 February reported better-than-expected full-year operating profit and said it will increase prices this year to tackle an increase in costs.
Most companies have hiked prices in a bid to pass on some of these costs to their consumers. Although a cost of living crisis has seen a shift in consumer spending, packaged beverage and food makers have continued to see resilient demand.
"The environment in terms of input costs is very challenging and pricing is very important to manage inflation," Ben Almanzar, chief financial officer at the soft drinks bottler, told Reuters.
The Switzerland-headquartered company, in which US beverage giant Coca-Cola owns 20% stake, said it expects 2023 organic operating profit growth in the range of +3% to -3% as glass manufacturing prices and input costs continue to rise.
London-listed bottled drinks maker Fever-Tree warned last month that its 2023 profit would fall short due to rising costs of glass bottles, ingredients and packaging.
Coca-Cola HBC said costs it incurred per case in 2022 rose 17% and it expected this to increase by low teens percent this year.
Full year earnings fell about 12% to €703.8 million, beating company-compiled analysts' consensus of €658.2 million.
Still, full-year net sales revenue rose 28.3% to €9.20 billion.
Shares of the company were up about 4% at 2,024 pence as of 1020 GMT on Tuesday 14 February.
"CCH is better able to navigate a tough external environment vs history given investments made over the past years around commercial capabilities with the cost base having also been reset during the pandemic," analysts at Jefferies said.