Coca-Cola uses AI and technology to boost sales in a challenging economic environment

Coca-Cola increased its revenue by 31% in the April-June period to $12.4 billion, beating analysts' expectations of $11.8 billion. Earnings per share also increased by 7%, from 81 cents to 84 cents.

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This increase was due to a number of factors, such as a global average price increase of 9 %, an overall increase of 13 % compared to the previous quarter and a 2 % increase in case volumes.

This seesaw reversed in North America where volume declined by 1% while product prices in that region increased by 11%. Company CEO James Quincey is confident in his company’s ability to “keep as many consumers as possible within the franchise” even as “times get tougher.” He said this is thanks to the use of AI, digital technology and improved marketing to drive innovation, pricing architecture and improved pricing.

We will continue our efforts in marketing, innovation, pricing and execution. "That's how we earn the right to charge a fair price," he said.

Marketing can be enhanced by using digital tools such as QR codes

Quincey, for example, explained that The Coca-Cola Co. has been able to generate volume despite its recent price increases, in part because of Studio X. "It's our digital ecosystem and organization that integrates our marketing capabilities and connects them to our global network structure.

He said: "We produce bespoke content at scale and quickly. We are also able to track the impact in real time."

Quincey explained that Coca-Cola and Marvel partnered in the second quarter to produce nearly 40 collectible graphics, known as QR codes, on their packaging. These QR codes offered “unique augmented reality experiences” to consumers.

He said the Coca-Cola brand grew its volume and gained volume and value share in the third quarter. "Our transformation and marketing journey resulted in Trademark Coke being named Creative Brand of the Year at Cannes Lions for the first time in history." "We won 18 awards at Cannes Lions."

Coca-Cola, he said, is focusing on commercializing the innovations it launched just over a year ago.

We know that innovations that develop in year two are more likely to succeed over a longer period of time and have greater impact. We have focused on sustained investment and have improved the success rate of year two performance in North America and Europe in each of the last four years.

AI improves pricing with personalized messages

Quincey said the company is also testing an AI-based tool for channel optimization aimed at “better tailoring solutions to increase volume and revenue.”

AI is also being used to boost sales through personalized messages despite price increases.

Early results indicate that the tool both improves the quality of our products and also speeds up time to market. The system also uses AI to send personalized messages to retailers, suggesting items based on their previous purchases and market information. In early pilots, retailers receiving the message are 30% more likely than others to purchase the recommended SKUs. This translates into increased sales for both the retailers and the system. “We’re just scratching the surface, but we’re taking steps to capitalize on future opportunities,” he explained.

Coca-Cola remains optimistic despite uncertain consumer landscape

Coca-Cola is having a very different experience than its rival PepsiCo. PepsiCo reported lower-than-expected revenue earlier this month due to a volume decline of between 4.1% and 3.1% in its North American snacks and beverages business.

PepsiCo is a competitor of Coca-Cola reportedThe company's beverage division saw a 4.1% drop in volume, but this was a larger decline.

Conagra is the opposite. reportedThe company is recovering its sales volume. Snacks increased by 0.4% and frozen products decreased by only 0.4% compared to the previous year, when sales volume had fallen by 3%.

Coca-Cola, as well as Conagra, attributed their respective companies' recovery to marketing and advertising that helped them capitalize on consumers' fears of inflation.

Quincey said Coca-Cola plans to counter consumer hesitation by offering food and beverage combinations.

He said it is not shocking to see Coca-Cola struggling in its out-of-home operations.

He said: "We already denounced some softness outside at the end of last season, so this feels more like a gradual build-up... than anything big or sudden, and there's no acceleration from a steep cliff."

Coca-Cola raised its forecast for the rest of the year despite challenges overseas. It now expects organic revenue growth of 9-10 percent a year, compared with a previous estimate of 8-9 percent a year.