Squawk on the Street+ Coca-Cola CEO James Quincey 2/11/25

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Carl Quintanilla (0:44)

Let's get to one of the big earnings movers of the day. Coca-Cola shares are rallying after comfortably beating estimates. Joining us exclusively is Coca-Cola Chairman and CEO, James Quincey.

James, what stood out here is the growth from pricing, from volumes and across the board at a time where other consumer staple companies, especially, are just not seeing that. What's working for you right now?

James Quincey (1:07)

Look, I think we've been building momentum over a good number of years and you're seeing that come through in the fourth quarter and for the full year of 2024 It's across the line. It's the right level of marketing, the right level of innovation, execution commercially with our partners, putting the right packs and prices and commercial execution out there. So it's not a silver bullet. It's the sum of lots of hard work across a lot of levers and it's turning into good momentum in the fourth quarter and for the full year in 2024

Carl Quintanilla (1:35)

Yeah. Talk about what you see coming down the pike, especially in the US market where there has been a little bit more concerned lately. McDonald's, for instance, weaker US numbers. I guess they are more exposed to the low-income consumer, but what do you see? Yeah.

James Quincey (1:51)

Look, in the US, in North America, probably also quite similar to Western Europe, we've seen the lower-income consumers remain a bit under pressure from a disposable-income point of view, and so we've had to really double down on some of our affordability options with packaging choices. But overall, the aggregate consumer demand is still pretty robust, still holding up well, and that's why our North American business not only grew in the revenue line, but actually grew volume in the fourth quarter. So we're seeing, yes, pockets of weakness, but overall good aggregate demand, and we see that continuing into 2025 So we're feeling positive and confident about our ability to grow in 25 in the US.

Carl Quintanilla (2:34)

One of the questions for the industry is obviously tougher environment for pricing. You still see it working, but how do you realize margin improvement in an environment where it's not as easy to pass on those higher prices?

James Quincey (2:48)

Yeah, I mean, firstly, obviously, input costs are moderating, inflation is moderating, and so the price levels that we need to look for are also moderating. But we have a very clear strategy of supporting that, not just with the marketing innovation, but making sure we use the full breadth of all our packaging options, whether it's different types of packaging, the plastic bottles, the cans, the fountain cups, in all different sizes, so that whatever your pocket level and whatever beverage category you want to be in, we have a price point and a package size that works for you. And that has been a successful strategy to help manage these situations where you have certain segments of the population under income pressure, but overall good demand. And that's a well-honed strategy at the company and it's certainly working for us in the US.

Carl Quintanilla (3:35)

You have a really good global view, James. How are the brands navigating the geopolitical headwinds, especially in places like the Middle East, where you and other American companies have seen boycotts?

James Quincey (3:47)

Yeah, as global as the Coca-Cola company is, and some of our brands are truly some of the most global brands in the world, it is also a profoundly local business. The cokes in each country tend to be made in that country, and that's as true in the Middle East as it is in the US or Latin America. And so we've been investing a lot of money, and I think a simple example was Turkey in the first quarter, where we'd come under pressure for the situation in the Middle East, but we really invested money in demonstrating how local the business was, and how made in Turkey the business was, and that helped us rebound and pull it off. So I think it's this strange combination of being truly global, but also very profoundly local, and letting people know that's true, that they're supporting local jobs helps us manage our way through some of these geopolitical issues.