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Coca-Cola Turns To Refillable Glass Bottles In Fight Against Inflation

By Dave Simpson

Coca-Cola Co KO.N warned on Monday 25 April that consumer demand could slow as rampant inflation shows no sign of cooling and said that it was focussing on more affordable and refillable glass bottles in markets facing the biggest pinch from price increases.

Details

Demand for sodas and other packaged foods has so far held strong despite price increases that resulted from higher costs for everything from aluminum cans to sugar, labor and transportation.

Coca-Cola chief executive officer James Quincey said that the resilience in demand will not last forever.

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"I do not expect (price) elasticities to be inelastic going forward. I expect elasticity to increase at some point in the future. Will that be next quarter? Or will that be next year? I can't give you the answer to that," Quincey said on call with analysts.

Procter & Gamble PG.N earlier this month said it expected demand for its US feminine, home and oral care products to soften as summer price increases feed through to shop shelves.

To prepare for the expected drop in consumer purchasing power, Coca-Cola said that it was expanding the distribution of cheaper returnable or refillable glass bottles in emerging markets in Latin America and Africa.

It is also experimenting with returnable bottles in the Southwest United States.

Coca-Cola Co KO.N beat quarterly revenue expectations on Monday 25 April, helped by higher prices and a rebound in demand for its sodas at theaters and restaurants.

Net Revenue And Profit

Coke's net revenue rose 16% to $10.5 billion in the first quarter and its shares were up 1.6% in morning trading on Monday 25 April. Analysts had expected revenue of $9.83 billion, according to Refinitiv data.

The company said that suspension of its operations in Russia would impact its annual profit by four cents per share and annual net revenue by approximately 1% to 2%.

It reported a first-quarter profit of 64 cents per share, beating estimates of 58 cents, according to Refinitiv data.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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