The world's two largest soft drink producers are warning of a significant price increase: both Coca-Cola and PepsiCo are experiencing considerable cost increases and, as a result, greater pressure on margins.
Both multinational companies released their results and expressed their expectations for the current fiscal year, which appear to be highly uncertain. The costs of aluminum cans, transportation, and labor are rising sharply, and this pressure on margins leaves producers with no choice but to raise prices.
"Double-digit inflation"
Hugh Johnston, PepsiCo's chief financial officer, told Reuters that the company may raise prices further at the end of the year if costs rise more than expected, and also did not rule out product shortages as the supply chain is still struggling. Hugh Johnston expects " double-digit inflation ."
Coca-Cola is also cautious: “ Is this year likely to be perfect? No, but we are doing everything we can to optimize our overall availability ,” said CEO James Quincey.
Coca-Cola saw sales increase 17% last year, with profits up to a quarter higher than in 2020. Price increases in the fourth quarter boosted net income. The manufacturer expects sales to grow 7% to 8% this year and anticipates rising inflation.
PepsiCo reported 12% revenue growth in the fourth quarter, but net income was slightly lower due to higher costs.
