WASHINGTON, D.C. – New earnings data released by Coca-Cola and PepsiCo — which together control about 75% of the U.S. soft drink and beverage market — reveals that they saw their net incomes soar higher into the billions, all after both companies increased prices on consumers. PepsiCo reported a first quarter net income of $4.3 billion — a 148% increase from last year — and spent $193 million on stock buybacks. Mere months ago, PepsiCo’s CFO suggested that inflation has left the company no choice but to raise prices by up to 10%.
During an earnings call yesterday, Coca-Cola’s CEO said the company would continue to “err towards taking the price increase” despite reporting $2.8 billion in net income, doling out $1.9 billion in dividends, and planning to spend $500 million in stock buybacks this year. Back in its fourth quarter, Coca-Cola even reported a 9% increase in revenue, “driven by a 10% increase in prices.”
Coca-Cola and PepsiCo’s massive profits reaffirm ongoing research from Accountable.US exposing how major companies across several industries are using the pandemic as an excuse to increase their wealth and line their shareholders’ pockets at the expense of working families.
PepsiCo and Coca-Cola, which control three-fourths of the U.S. soft drink and beverage market, seem to be competing over which can raise consumer prices higher without justification. They are emblematic of major corporations claiming inflation pressure forced them to raise prices so high while reporting billions more in profits than the previous year and big new rewards for investors. There’s no sugarcoating this trend of profiteering. Companies making obscene profits during the economic recovery have a choice, and companies like Coke and Pepsi chose to chase record profits rather than keep prices stable for everyday families.”
Kyle Herrig, president of Accountable.US.
Coca-Cola and PepsiCo’s pandemic profiteering comes as new reporting shows that more than half — 53.9% — of price growth in the non-financial corporate (NFC) sector since the second quarter of 2020 “can be attributed to fatter profit margins.”
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In its earnings report, General Mills said the quiet part out loud, admitting to expecting strong fourth quarter numbers thanks to “ongoing elevated consumer demand for food at home.” The company saw its quarterly net income increase 11% to $660 million and spent $934 million on dividends this fiscal year after price hikes of up to 20% on hundreds of items in January.
In its earnings data, Hormel Foods — which planned on hiking prices not once, but twice, in 2021 — touted “its fifth consecutive quarter of record net sales” and $132 million in first quarter shareholder dividends. The company is doing so well that it completed a $3.35 billion acquisition of Kraft Heinz’s Planters peanuts — the largest acquisition in the company’s history. CEO Jim Snee even admitted that this acquisition was a “catalyst for earnings growth.”
In December 2021, Kroger’s Chairman and CEO said the company was “in a position of strength“ as the grocery chain reported a third quarter operating profit of $868 million and spent $297 million on quarterly stock buybacks just months after it said it was “‘passing along higher cost to the customer.'”
Over the last several months, Accountable.US has documented how clear pandemic profiteering and corporate greed from industries including big oil, meat packing, shipping, trucking, retail and railroad companies are making inflation and supply chain challenges worse for everyday consumers.