Coca-cola may have to go up after the three-dollar era。
According to the beijing business journal, coca-cola products in the hebei, henan and shandong regions have started to increase prices in recent years, of which 888 ml of coke, sheba, fanta were adjusted to $5 and 2 litres of pet bottled products to $7。
To date, there has been no official response from coca-cola china to this news. The interface news received from some distributors in the above-mentioned regions that the rotation price does exist. Of these, eight bottles of 2-litre-specified coke, with the most recent price adjustment having been made, the purchase price for a container was approximately $44-45。
One dealer indicated that he had received notice of an increase in prices, after which the full container price was $41-42. On this basis, it is estimated that the price increase for the full container of two litres of coke would be approximately $3-4 and the price for single bottles or about 5 cents. In contrast, 888 ml-specified coke, shelby and fanta used to have a single bottle price of about $3. 5, and this round went up。
However, the dealer also indicated that the rotation price provision did not impose a mandatory requirement on the final retail price. In contrast, the customer service of the coca-cola official small program indicates to the financial community that “cola recommends a retail price of 3. 5 (dollars/bottles), but there are differences in the pricing of different merchants everywhere, where it is impossible to determine the price of the merchants themselves”
This is the second time that coca-cola has been raised this year。
Earlier, in april, several price increases for coca-cola's beverage products had been circulated on the internet, covering most of the products under its flag. Among them, a letter from hubei tetra coca-cola beverage ltd. Indicates that, as of 20 april 2024, the company adjusted the recommended retail prices for some products, with a recommended sales price of $2. 5 million for 300 ml soda, a recommended price of $3. 50 for 500/600 ml soda, a recommended price of $4. 5 for 888 ml soda, 450 ml juice, and a recommended price of $1. 8 l juice。
Another communication, issued by zhengzhou taco cola beverage, inc., shows that “with the adjustment of the price of the supply, the proposed sale price for 500 ml of coke/schilling/finda/divine/zero/zero card was adjusted to 3. 5 on 19 april 2024”. The above-mentioned information has not yet been responded to and confirmed by coca-cola。
In conjunction with the media reports of the last two years, there have been rumours of multiple rounds of price increases in coca-cola, and in may there were several media reports of multiple terminals in coca-cola across the country that have increased prices to varying degrees. The media reports refer to an increase of 2. 9 per cent - 11. 4 per cent, known as another price increase since 2022, when it entered the “us$ 3. 5” era。
In combination with industry dynamics, the price increases are mainly due to higher costs of raw materials for beverage production, supply chains, packaging materials and manpower。
The cost of the soft beverage industry, as measured by the chase securities study, is 20 per cent for the manufacture of raw materials and 15 per cent for the manufacture of artificial, white sugar, juice and other raw materials, respectively. Since the second half of 2023, large commodity prices have continued to rise, especially white sugar, which accounts for higher raw materials costs in the beverage industry, and high prices have been even more innovative。
Against this background, the beverage industry has been offered more than two years ago。
There were also three pepsi exchanges from 2022 to april this year, the most recent of which stated that, from may, “the price of the supply of the product will be increased by one to two dollars in each original box in order to maintain the company's normal operations and to conform to market patterns”. In april, master kang's one-litre iced tea was also reported to have increased to $4 in multiple terminal prices。
The cost pressure of coca-cola is not limited to the chinese market。
In july 2023, according to the british financial times, john murphy, president and chief finance officer of coca-cola, announced at the press conference that, in the context of a more resilient demand, the company was planning to continue raising product prices in the second half of the year in line with inflation rates across the globe. In may this year, coca-cola japan announced that it would raise the prices of a large number of commodities under its flag, including plastic bottles and various types of coke that could be canned with a can of water, up to a maximum of 20 per cent。
Balancing sales against prices is a continuing challenge for fast-forward companies。
Throughout 2023, coca-cola earned $45,754 million, an increase of 6 per cent, and operating profits of $11,311 million, an increase of 4 per cent. Global single-box sales increased by 2 per cent; and asia-pacific market single-box sales increased by 2 per cent, driven mainly by growth in china and india. The sales of gas-containing beverages increased by 2 per cent over the fourth quarter and throughout the year, driven mainly by growth in latin america and asia-pacific markets。
In the case of increased cost pressures and competition, the pressure on the price of coca-cola shifted to the channel。
According to data immediately won by retail monitoring agencies under the fast-forward line, the price of the final sale of coca-cola was not significantly affected by the price increase in last year's boom. In january-july 2023, while prices for products with different specifications fluctuated, there was, overall, a slight decrease in the overall average price of the various specifications in the coca-cola classic. Small-specified group products (220ml, 300ml, 330ml, 500ml) with no sugar flavor have seen a slight price increase, while large-specified products have been subject to a sharper price reduction。
It remains to be seen whether the current round price increase will drive retail terminal prices more significantly, so consumer perceptions of price increases at the end may be less evident。
In the case of two litres of coke, the interface news shows that the six-barrel full of the product at coca-cola’s own flagship shop is currently worth $39, and the equivalent of a single bottle is $6. 5。
Considering that the consumption of carbonate beverages is mainly concentrated in the under-line supermarkets, the interface news from the united states mission's outreach platform shows that two litres of coke were sold at convenience stores and shops in zhengzhou at a price of $5. 9-9, while 888 ml of coke was sold at $3. 75-$5. 5。
On the whole, consumers still have choice because of the lack of uniformity in the pricing of individual businesses and the greater price span. Following the above-mentioned information from a distributor to the interface news, this rotation price provides for no rigid requirements for final retail prices, a higher level of freedom for businesses and promotion by some of them, which may also be at a loss。
