Coca-Cola's price rises for the first time in three years
Experts believe that this will accelerate the reshuffle of the industry, and SMEs will fall into a "dilemma" if they do not follow suit
After three years, Coca-Cola will increase its price again!
Coca-Cola CEO James Quincy recently stated that the company intends to increase product prices due to rising raw material prices.
The reporter noticed that the products of e-commerce channels are currently being promoted or have subsidized prices, while the normal price of Coke in the convenience store channel is 3~3.5 yuan a bottle.
In this regard, China’s food industry analyst Zhu Danpeng told the Guangzhou Daily all-media reporter that the price increase of Coke may lead to a general rise in the beverage industry. In the case of rising raw material costs, small and medium-sized enterprises will fall into a “dilemma” if they do not follow the trend and increase prices. The round of industry shuffle or start from this.
Faced with huge cost pressure, net profit fell in the first quarter
"We have good hedging measures in 2021, but the pressure in 2022 is increasing, so prices must rise." Quincy said that Coca-Cola intends to "wisely" manage price increases, such as using different packaging. It gives consumers different price choices, but it has not disclosed the specific products that will increase prices.
It is reported that the last time the company announced a price increase was in 2018, when it was affected by the U.S. tariffs on aluminum.
On April 19, The Coca-Cola Company also announced its corporate financial report for the first quarter of 2021.
The financial report showed that Coca-Cola's first quarter revenue increased by 5% year-on-year to 9.02 billion US dollars, but the company's net profit was 2.25 billion US dollars, which was a 19% decline from the 2.78 billion US dollars in the same period last year.
It is reported that in March of this year, its customer demand has reached the level before the epidemic, but Coca-Cola executives emphasized that the global recovery is uneven.
It is understood that during the epidemic, Coca-Cola shifted its production focus to the use of larger retail packaging to attract consumers who spend more time at home and like to stock up in stores.
But before the epidemic, both Coca-Cola and its competitor Pepsi favored small canned and bottled beverages. The unit prices were higher for consumers and more profitable for companies.
The executives of PepsiCo recently stated that after the epidemic is over, it is expected that beverages in small packages will once again swept the market.
The price increase will come at the cost of losing some consumers
After the news of Coca-Cola's price increase, some consumers said with a smile that the price increase of Coca-Cola just gave themselves a reason to quit Coke and switch to other "happy water".
Some consumers also expressed their understanding of the price increase of Coca-Cola: the price of Vitality Forest is not low and it is suspected of misleading consumers with slogans. Coca-Cola, which has not increased in price for many years, has only sold for 3 yuan.
Does Coca-Cola's price increase count as a "leading increase"?
Will the beverage industry generally raise prices before the peak season this summer arrives?
In this regard, some insiders have analyzed.
"As a leading global beverage brand, the price adjustment of Coca-Cola will certainly lead the entire industry to follow the trend and increase prices, but behind this round of price increases is a new round of survival of the fittest. Large companies are relatively strong and confident in responding to price increases, but small and medium-sized enterprises If you don’t follow the trend, you’ll be in a dilemma. This round of price increases may accelerate the industry reshuffle.” China Food Industry Analyst Zhu Danpeng told the Guangzhou Daily All-Media reporter that the current trend of domestic consumption upgrading is obvious, and there are many high-priced products in the beverage industry. Coca-Cola offers The price range is generally only a few cents, and the impact on consumers is limited. Instead, the public is more sensitive to brands and categories.
He believes that people who are chasing "happy water" are actually not sensitive to prices.
Some industry observers believe that although Coca-Cola’s move can help the company increase profitability “simple and straightforward”, it will also come at the cost of losing some consumers.
In fact, under the consumption concept of pursuing a healthy diet, carbonated beverages have gradually become colder on a global scale.
It is understood that in the first quarter of this year, Coca-Cola's global single-box sales were the same as the same period last year, and March sales have returned to 2019 levels.
In terms of category, driven by strong growth in China, India and Latin America, the global single-box sales of Coca-Cola's soda category increased by 4% year-on-year, while sales of sugar-free cola rose by 8%.
Among them, single-box sales in the Asia-Pacific region rose 9%, and single-box sales in North America fell 6%.
The global single-box sales of nutritional drinks, juices, dairy products and plant beverages have achieved a 3% growth, mainly due to the strong growth of Minute Maid Orange in the Chinese market and Maaza in the Indian market.
Affected by the epidemic, outdoor sports are restricted and Costa retail stores cannot operate normally. Sales of Coca-Cola's sports drinks, coffee and tea businesses plummeted by 11%.
(Reporter Tu Duanyu)