The Fourth of July is almost here, and that means picnics and cookouts galore. Who isn’t down for a barbecue under the warm summer sun, enjoying fresh off the grill treats and cooling down with a beer or a fizzy soft drink? But if your favorite soft drink falls under a PepsiCo or Coca-Cola label, be prepared to shell out a little bit more for your summer refreshment. Both PepsiCo and Coca-Cola have announced price increases in anticipation of the Fourth of July weekend.
PepsiCo CEO Indra Nooyi has stated that this decision was based on both an improving overall economy and rising commodity costs that must somehow be offset. In turn, PepsiCo’s biggest competitor Coca-Cola has also announced plans to increase the prices of its soft drink beverages by an average of 3-4 percent. According to BusinessWeek, Coca-Cola Refreshments has said prices would be raised on July 31, while Coca-Cola Consolidated is cited as saying it would raise prices as much as 5 percent by early July.
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According to Bloomberg News, bottling plant Coca-Cola Consolidated also outlined some of the raw materials that have increased in price over the last year, contributing to the price hike – the plant states that corn prices are up by 110 percent, aluminum is up by 24 percent, plastic by 42 percent, and crude oil by 43 percent. Still, neither PepsiCo nor Coca-Cola are likely worried about any damage from falling profit margins on account of these material increases. Preceding the price hike, Convenience Store News recently noted that PepsiCo reported earnings up 13 percent in its second quarter with an 8.9 percent increase in sales.