The Coca-Cola Company (NYSE:KO) Q2 2023 Earnings Call Transcript

But if you concentrate where Russia is, which is Europe, which is the biggest impact, actually, Europe had a positive volume in the first half if you take out Russia. And so we’re feeling good about Europe as we go into the second half. And I think the question really is the trade-off between pricing and volume in a couple of countries, particularly Turkey and Pakistan and for those that want to go deep down the rabbit hole, Zimbabwe as well. Now the next part of the question, which was about our Away-From-Home versus At-Home. Yes. It wasn’t just June, which was the strength in the US basically the first half. You’ve seen the Out-Of-Home growing ahead of the At-Home and the recovery. And I think that’s the way to think about it is we’re seeing the back-end of the recovery in the Away-From-Home.

Similarly, in Europe, in fact, globally, transactions were ahead of volume, which tends to imply smaller packages are growing faster than bigger packages from a mathematical point of view. So as a global feature, there’s a little more on-premise consumption or a little more small package consumption than large package consumption, which helps as well. But I don’t think we should see this as a new secular trend, more the kind of the last bit of renormalization post-COVID.

Operator: Our final question today will come from Peter Grom from UBS. Please go ahead. Your line is open.

Peter Grom: Thanks, operator, and good morning, everyone. So James, maybe just two quick follow-ups. One, just on Chris’ question around trade down and improving affordability. Do you expect any changes in the promotional environment, particularly in North America? It doesn’t sound like that’s a shift you expect, but just wanted to be sure. And then just following up on your response to Andrea’s question, I would be curious how you see channel mix evolving as consumers seek more value in some of these developed markets, particularly just given the strength from Away-From-Home that you just alluded to? Thanks.

James Quincey: We see the US pricing and promotional environment as pretty rational. We have a set of strategies in place to try and balance our premiumization, regular and affordability strategies in the US, which includes a little more promotion than the first quarter. But basically, promo levels are very similar to prior years and not as a step up. And we think that we have the right balance of premiumization and affordability plays to be able to continue to gain as we did in the second quarter volume and value share in the US. So we think the environment is rational. We think our strategy works for us because we gain volume and value share. And we’ve got the right mix of — roughly the right mix of promo and price. And obviously, we’re going to continue to push the affordability and the premiumization play.