The U.S. Coca-Cola market just isn’t what it used to be — bottler Coca-Cola Enterprises’ profit fell 23% due to commodity costs and sluggish U.S. sales. The solution? Raise prices. You can expect battled Coke to cost a little more after labor day.
Coca-Cola Enterprises, which has about 80 percent of the United States market for Coke, said it would raise prices after Labor Day because of higher commodity costs and declining American soda sales. It said prices would go up by a percentage in the mid-single digit to high-single digit range. Bottlers set prices for retailers like grocery stores.
Hey, at least they didn’t change the bottle size, right?
Biggest Bottler of Coke Plans to Increase Prices [NYT]
(Photo: balmes. )
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Yo, Coke, you want sales to go up, replace that icky HFCS with cane sugar. HFCS is the reason many people stopped buying your drinks.
@ratnerstar:
that is my wish, however, I think Coke knows it can’t get away with shrinking a 12 ounce can and making the same money as raising the price. a 12 ounce can of soda is much different then a tube of toothpaste.
It did seem like soda prices (down here, it’s all Coke) went up pretty fast. While I hate to see another thing go up in price when the economy is so bad, I’m really glad I stopped drinking soda nearly three months ago. It’s strange. I never expected I’d be able to do that, but after a week or two of withdrawals and cravings, I’m fine. In fact, a couple weeks ago I had some Diet Coke with lime out of curiosity, and it tasted OK, but it gave me a headache after a few sips. I poured most of it out.
I go with Brita water or tea now.
@Tmoney02: Sounds like you have a problem with vendors/merchants not coke itself. They can only set the price that they sell to the vendor.
You’ll note that I did say I think Coke should ask the vendors to adjust the prices downward to help boost sales.
As for the rest of your post, you seem to be under the impression that I’m bitching about the price/availability of a necessity.
Pop’s not a necessity, never has been.
I’m speaking more to the fact that Coke is complaining about their inability to move enough of their luxury product and raising the prices to compensate. People get the fact that pop isn’t a necessity, and once the price goes too high they’ll quit buying it plain and simple.
Also, how do states that require a deposit on sodas work? I’ve never really understood that, probably because I live in a state that doesn’t require one.
They have changed the bottle size. I just visited a gas station in Virginia selling 16oz bottles for 99 cents. The 20oz Pepsi bottles next to them had a sticker on the window advertising that their products had 4 more ounces than Coke’s products.
@MissPeacock: yup. I had that encounter last night, buying drinks for a party. One store had Pepsi products 2packs for $10 and the CVS right next to it had 3packs for $10. To Each his own.
Has anyone else noticed how expensive a 20oz bottle is compared to 2 years ago?
@Pinget: Pretty sure that’s not true.
I figured this was coming soon. A gas station near my house is now selling 2/$3 on 20oz Coke products.@snoop-blog: Yeah, under a buck (just barely).
@lalaland13: When you buy a soda the deposit is added to the price like a tax. When you return the cans the store give you your money back.
So buy a 12 pack in Michigan you pay $1.20 in deposit (12 cans at 10 cents each) and next time you comeback you can return the empties for 10 cents each getting your money back.
I had some imported Cane Sugar Coke the other day, it is so much better than the Corn Syrup ones I would pay a premium to have it available here in the US.
@Dervish: Don’t be too sure, its why I will spend the extra $ for Jones Soda which has cane sugar.
We quit drinking soda a few years ago for health reasons but it wasn’t too hard since we were spending crazy amounts of money on it and it really isn’t even a food. Though the withdrawls were horrible. I think coke puts something in their soda that is seriously addictive that other sodas don’t.
Sales are probably down because more people are figuring out that soda consumption is bad for you and a waste of cash.
@Red_Eye: Consumerist readers are a well-informed but small percent of the soda market. I’d guess the dropoff in sales has more to do with pinched budgets than HFCS as an ingredient.
“This is insane. So poor sales = price raise? That doesn’t seem smart.” – I dunno, it’s how USPS has been doing it for years now. I’m agreeing, just pointing out the stupid logic is used elsewhere. It’s the reverse of supply and demand that I learned.
I think Coke would do much better if they didn’t spend so much on their dumbass commercials. After watching one I don’t think I want a Coke I think WTF?
I saw a story about this a couple of months ago.
The higher commodity price is the HFCS. All corn based products have risen in price, and it will be affecting beef soon as well. If they want to reduce costs, they should move back to cane sugar, as it is now cheaper. The main reason for the switch to HFCS was the cost savings. Things have reversed, so should they.
@MrFreshy: I knew HFCS has gone up but wasn’t sure of sugars prices. If it is cheaper I wonder if they are hesitant to switch back because they would have large up front costs to switch over machines? Or they think people would actually switch because the taste changed from the HFCS taste.
@Tmoney02: I think sugar is still more expensive than HFCS. But let me tell you that Coke made with sugar is delicious. Coke in other countries tastes amazing and when I inquired into the diff in taste it’s precisely because they use sugar and not HFCS. Hopefully the price increase applies only to regular coke and not Diet or Coke Zero (which I’m addicted to)
For the last 10 years I tried quitting coke so many times. Mainly for political reasons, you know, the killing of trade unionists in south america and things like that & the close relationship with the CIA that coke has.
Finally, when I was doing my teeth whitening thing, I was able to give it up for good, and I’ve been Coke free for 6 months. I lost 17 pounds. (Some of that has to do with going to the gym more.) There’s no question Coke is terrible for you.
… who has the other 20% of the US market for Coke? Isn’t ‘Coke’ a registered trademark or name or some such that prevents others from using it? :confused:
If only someone could convince some of the CEOs at Coke that the decrease in sales is due to consumers boycotting their product because of their support of the Beijing Olympics.
While I know that the economy, rather than a sudden concern over Tibet, is why sales have dropped off, its still a nice thought . . .
@bohemian: YEah, this is the main reason for my decrease in drinking soda. I want to save my teeth and its more or less empty calories.
Hrm… I see their using GM tactics. Lets see how long this lasts.
@MrFreshy: Switching would be knee jerky. They have to ride it out to see if corn prices stay elevated. When this whole corn ethanol thing finally collapses (as it should hopefully soon), Coke wouldn’t be in a position to take advantage of the super abundance of left over corn over-production.
I haven’t figured out the way these companies are working… they are having trouble moving inventory, so they are raising prices?
I know I skipped a few marketing classes, but… ?
Is it the Grey Goose strategy? Price it high, everyone will want it then.
I thought that only worked with new products.
Are they saying that 20% of Coke is counterfeit?
@failurate: lol I was thinking along similar lines. Sales drop, solution: raise prices!
If this happens with Pepsi products too, I’ll start switching over even more to home made lemonade.
Here, it’s “officially” about $6.99 for a 24 pack of 12 oz cans, but I only buy it when it’s $6.00 and under, which is usually the case with sales. But the price has been creeping up and I’ve been moving toward drinking less of it.
@AMetamorphosis: Yeah, but that was advertised as a “limited time” promotion. They only offer those every so often (and last time I remember you could only get one period).
Since when does raising the price of your product help sales? I can understand the logic that if your costs to produce go up, you have to raise the retail to cover those. However, Coke seems to think their product flies in the face of economic reality that says when you raise prices, you sell less.
I don’t really drink much soda, so this isn’t a huge issue to me, but I find their explanation pretty funny. Of course if this means my Rum’N'Cokes start costing more, I might get a little grumpier.
The drink companies don’t just have inventory laying around. Warehouse space is money. Most regional bottlers get the product in the back door, and is out the front door in a day or so. Costs to move this product from one place the next have skyrocketed, and you expect the company to just “drink it?” As a KO shareholder, I beg to differ.
I expect the company to make a profit, but more importantly don’t be stupid about it.
@failurate: mmm, knee jerky.
I’d gladly pay an extra 50% for a Coke made with real cane sugar instead of high fructose corn syrup.
@ToddBradley: Agreed. IF they’d bring back the sugar, I’d be willing to pay more. I already do pay more for Jones Soda because they use cane sugar.
@alfundo:
So there’s just two ways to handle rising costs: grocery shrink ray, or raise prices. Coke can’t use the shrink ray on its’ 12 oz cans and 2 liter bottles, so the only alternative is to raise prices.
I wonder what other items (besides beverages that come in standard 12 oz cans and 2 liter bottles) are out there in packages that are so standard that they are immune to the shrink ray?
How about the gallon or half gallon of milk? Immune?
@allstarecho:
I was watching a “modern marvels” the other night on soda pop, and a store owner that sells hundreds of varieties of soda claimed that to his palate, cane sugar had a better flavor than corn syrup, it had ‘more snap’ as he put it.
@Marshfield: We have one of those stores here in Jackson, Mississippi. It’s called The Soda Emporium and he sells everything from Coke with sugar to dill pickle soda. I go at least once a month to get “real” Coke.
In Michael Crichton’s book “Sphere,” one of the team members who investigates a ship from the future finds some Coca-Cola and says “remind me to invest in Coke.” At the time (this was years and years ago) I thought to myself “well yeah, coke will be around forever, why not?” But after this news, it makes me second-guess everything. What times we live in where Coca-Cola is in trouble. *sigh*
Does anyone remember those 20 ouncers used to be 16….then all of a sudden everyone says “4 ounces free!!” all of a sudden up goes the price from 79 to 1.10 now it’s like 20 ouncers have been here forever……what if they went back to 16…..lol
Actually, they ARE shrinking the bottles in vending machines, at least in my part of MD. They’re back to 16 oz. Ran into TWO of these machines in the past week. My diet says yes to the 50 less calories, but not my thirst for sugar and caffeine in one convenient liquid.
A 20oz bottle of Coke costs either $1.39 or $1.49 plus 7% tax here in Mississippi already. That’s the 2 prices you’ll find depending on where you go.
Oh well, give it a few more weeks.. they will sell out to some foreign bottler like Budweiser did.
Yet another reason why I’m glad I’ve been free from my Coca-cola dependency for three months now.
Also, does anyone remember when the machines sold soda in cans instead of plastic bottles? I only see a can vending machine once in a blue moon. Not only were the cans so much cheaper, but they were smaller, meaning I could actually finish them and I would drink less of that disgusting black mixture called Coke in one sitting. I think the slow switch to bottle vending machines has helped contribute to our country’s obesity problem since everyone has more coke.
@loganmo: Just checked out the Soda Club website, and the basic “soda lovers” starter kit is $109 + $19.99 shipping. It makes 48 liters of soda, which would be the equivalent of paying $5.37 for a 2-liter! Nice idea, but not thrifty.
@CaptainSemantics: See my comment above. Cool idea, way more expensive than store-bought. Of course, if someone else is buying, then go for it!
Damn, considering there is always a boat load of Coca-Cola and Pepsi products here, I was assuming their sales weren’t going down. It sucks that they’re being raised, but then again, everything else is being raised now too.
That’s okay–I don’t buy poison, anyway.
People can’t live on soft drinks, but they are dying on them.