What’s going on?
Coca-Cola posted its highest quarterly revenue and profit since 2016 on Monday, and the drinks maker has already found its next untapped market: dead-eyed avatars.
What does this mean?
You’ve got to hand it to Coke: the rising cost of its drinks didn’t put loyal customers off last quarter, but the company still went out of its way to cater to an inflation-hobbled market. It released smaller bottles at more affordable prices (which, less altruistically, probably had higher profit margins), and subsequently sold 8% more products last quarter than the same time last year. That helped push up the company’s organic revenue – which strips out the effects of currency swings and acquisitions – by a better-than-expected 18%. And even though it announced that suspending operations in Russia – one of its fastest growing markets – would bruise growth, the company stuck with its full-year revenue target for 2022.
Why should I care?
The bigger picture: Consumer staples aren’t invincible.
Coke’s results aren’t exactly surprising: it’s a consumer staples company that sells products people tend to buy no matter what. But Coke acknowledged that there’s only so far that it can put its prices up before customers put the bottle down, while admitting that even higher costs – of sugar, aluminum, and more – were on the way. Fellow staple Kellogg’s said similar things earlier this year, suggesting the typically recession-proof sector could eventually see profits melt away like yesterday’s soggy cornflakes.
Zooming out: Epic marketing, n00bs.
It’s good to know that if you’re ever feeling virtually parched, you can just slake your virtual thirst with a refreshing virtual Coke: the company announced earlier this month that it would be launching a new drink in the metaverse. But not to worry if you’re one of the dweebs still hanging out in the real world: you could get your hands on the super-limited edition “pixel-flavored” drink when it launches next month.
Originally Posted April 25, 2022 – Pixel-Me-Up
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