Coca-Cola cracks open stronger Q3 than rival PepsiCo

Coca-Cola’s third quarter earnings were a bit sunnier than rival PepsiCo’s, and Coke’s volumes rose despite higher prices.

Coke’s net revenue rose 8% to $12 billion, while organic revenue was up 11%, leading the beverage giant to raise its full-year guidance for organic revenue growth to 10%–11%.

Global unit case volume increased 2%, but was flat in North America, with growth in soft drinks like Coca-Cola, Sprite, and Fanta, as well as juice and dairy beverages like Fairlife, while other bev categories declined. PepsiCo earlier this month reported a 2.5% dip in global volume, and a 6% volume drop for its North American beverage business.

“No matter what the degree of inflation in the environment, we want to protect the scale of our consumer franchise and see it grow,” Coke chairman and CEO James Quincey told analysts. “In other words, we want to see positive volume or transaction growth in the environment.”

Quincey said growth in North America came from the away-from-home channel, as lower income consumers pull back from buying its beverages for at-home consumption. Consumer spending shifted to discount channels and private labels across Europe, but less so in the US, Australia, and Japan, Quincey said. He also said the company has a “tremendous opportunity” in the US to introduce different pack sizes across bottles and cans to appeal to consumers feeling economic pressure who are looking for more affordable products, as well as shoppers who continue to seek out more “premium options.”

• PepsiCo CEO Ramon Laguarta noted earlier this month that the company has also been reducing packaging sizes to make its products more affordable.

Coke said in July that it wouldn’t continue to raise prices in the US and Europe. Prices are currently up 9% YoY, and president and CFO John Murphy said some commodity costs are normalizing, but could be affected by “tensions and conflicts.”