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00:00 Coca-Cola chairman and CEO James Quincy joins us now for a CNBC exclusive. Welcome back James. Good to have you.
00:06 Good to hear from you again.
00:08 So talk to us a little bit about what's working there because the organic revenue growth of 12 percent in the quarter and then your
00:14 outlook for four to five percent seem to
00:17 be better than Wall Street was expecting and you do have that mix of price and volume growth. So what's happening?
00:24 Yeah, look
00:26 I think this is the accumulation of what we've been doing over the last number of years really committing and
00:31 reinvesting in our business the marketing the innovation
00:34 The execution with our bottling partners and building momentum through our business
00:39 So actually the fourth quarter much like the whole year of 2023 and actually really the last five years
00:44 We've been driving really on a like-to-like basis at the top end of our growth algorithm
00:49 And that barring the little bit of hyperinflationary countries is what we're looking at in 24
00:55 continued momentum and continued success
00:57 Market particularly encouraged by the volume growth that you saw this quarter up to 2% because we did not see that across
01:03 packaged foods or beverage companies
01:07 How did how did you achieve that? And are you confident that that can continue throughout the year?
01:12 Yeah, look the 2% volume growth we got in the fourth quarter. Actually, it was 2% for the whole year 2023 actually 2%
01:20 Compound keg of the last five years we we very clearly have part of our strategy of focusing on keeping people in our consumer
01:28 Franchise are growing the number of weekly plus consumers in our business
01:32 Not withstanding whether inflation goes up or down
01:35 We have a very much a focus on that and the way we achieve it is not just the marketing innovation
01:40 but really thoughtful ways of making sure consumers who are under
01:45 Purchasing power pressure have options that are much more affordable whether it's on price points
01:50 Or the value of the pack so that we can keep them in the franchise and we believe that pays off in the long run
01:56 Yeah overall on pricing. I think you told me this morning that we're aside from some hyperinflationary countries like Argentina back to
02:03 Normal pricing in beverages. So what exactly does that look like and what does it mean?
02:09 And does it mean inflation is not a big problem anymore. We just got a hot CPI report
02:14 Yeah, if you if you take the fourth quarter, we reported a 9% price mix
02:18 But a couple of points were some intra quarter effects within the year
02:22 So really it was kind of a life like seven of which half of that was hyperinflationary countries
02:26 But the other three and a half came from the 95% of the business
02:30 So when you think about the 95% of the business three and a half on a global basis is pretty close to what we were getting
02:38 Prior to Kobe prior to this inflation spike a little bit less in the developed markets a little bit more in some of the emerging
02:45 Markets, but really getting into the ballpark of landing not too dissimilar to the CPI which has come from elevated levels
02:51 Yeah, it might be slightly harder to get from three to two, but it's getting close
02:56 to the kind of normalized levels and that's what we see in 2024 a kind of a normalized level in the 95% of the business
03:04 With the overlay of some hyperinflation but normalized on a much higher rate right than where we were
03:10 Pre-kovat when it comes to to pricing. I mean, how much more are we paying for cans than we were a few years ago?
03:17 Yeah, the costs are gone through. I mean if one looks at inflation over time that we very rarely get into periods of sustained
03:25 Deflation that's not just a consumer effect
03:28 That's also a supply chain effect actually part of the reason that central banks set a 2% inflation target rather than zero
03:34 It's so that they don't have lots of categories or areas the economy falling into deflation tends to produce a lot of negative consequences
03:42 So once once inflation comes through it tends to stay at those new elevated levels also also true of wages
03:48 It was it's been good to see
03:50 They also came along with the inflation report the wages have been outpacing inflation for a number of months now
03:57 So I think consumers are going to start to feel that there's a little more money coming in than going out
04:02 Relative relative to pricing and that we think is going to start to see we may start a little a little slower at the beginning
04:10 Of the year, but we think that momentum will slowly build through the year, which is it which is encouraging as we think about 2024