Coca-Cola made a bold move this year by revamping their Diet Coke line to a new look, but their risks paid off. Quarter 2 profits for the soft drink company skyrocketed past Wall Street analysts’ projections due to their low-cost bottling operations. Coke is reporting a $1 billion increase in profit as compared to last year’s report, despite sales declining 8%. Most of the profit has come from the Diet Coke revamp, as sales in the healthier drink choices were higher than predicted.
So with all this good news about the sales of the company, why is CEO James Quincey in talks to increase the per-can cost of Coca-Cola products? Well, it all leads back to President Trump. As many people are aware, Trump imposed new trade tariffs targeting trade allies like China and the European Union that affect the import prices on steel and aluminum. Quincey quoted in an interview with CNBC that “There’s some pretty broad based cost increases out there.”
One increase in specific is the increase in freight costs, but the CEO doesn’t want to put all the blame in one basket, citing “many factors” in the pressure for the company to increase costs. Luckily, Coca-Cola is not the only company suffering from these uncertain economic changes, as many companies are complaining about the rising cost of production which can affect revenue sales.