New Data Reveals Sharp Price Increases For Soft Drinks
If you drank a 2-liter of soda, your caffeine and sugar levels would skyrocket, much like the price of sweet carbonated beverages over the past few years (per The New York Times). Big soda producers have been battling flailing sales for decades, as soda's heyday starting in the 1960s began a steep decline after the 1990s. More recently, investors are concerned about increased taxes on sugary beverages and a healthier shift in consumers' mindsets and buying habits. New data shows that there are social and economic factors contributing to the notable increase in the price of soda over the past few years.
According to Food Business News, Coca-Cola's increased prices in 2018 and 2019 decreased consumption and upset investors with its fourth quarter returns. Still, the soda giant stood by its price hike, calling it a strategic move to focus on higher quality beverages and cull underperforming brands.
An eminent explosion can be predicted when adding Mentos to soda, just as price increases can be expected due to pandemic-related inflation. Pepsi-Co and Coca-Cola reported tight profit margins and price increases resulting from unyielding pandemic-related issues earlier this year (via Reuters). High costs of aluminum cans and supply chain issues led to price increases across the board for both brands. Despite the soda producers responding to packaging and supply disruptions, lingering inflation might keep prices up for an undetermined amount of time.
Soda prices keep going up
According to data from the U.S. Bureau of Labor Statistics, soda prices have been trending upward since 2019. The average cost for a 2-liter of soda in February of 2019 was $1.58, but as big soda producers began raising prices in an effort to focus on quality instead of quantity (via Food Business News), prices skyrocketed. A year later, the average price for the same 2-liter had shoppers paying an average of $1.61, which is a 1.89% increase from 2019 to 2020.
Soda producers who had already been increasing prices faced declining sales exacerbated by changes in social behavior as the pandemic set in from mid to late 2020 (per The Motley Fool). Consumers were staying at home more and buying soda less, and the average price of a 2-liter hovered around $1.64, an increased of around 2% from 2020 to 2021.
Pandemic-related issues and record-high inflation leave no six-pack unshaken, and soda company margins continue to decline amid increasing packaging costs and supply chain disruptions (per Reuters). Soda giants passed increased production costs over to consumers and raised prices by about 5% in 2022, according to Bloomberg. CNN notes that soda producers are concerned about consumers' ability to handle sticker shock on the soda aisle. After multiple price hikes, they fear it won't be long.