James Quincey, Coca-Cola chairman and CEO, joins CNBC's 'Squawk on the Street' to discuss the company's most recent earnings report, the potential impact of tariffs, when to expect volume growth, and much more.

Atlanta

Coca-Cola CEO James Quincey reported that the company exceeded earnings expectations and reiterated its full-year organic revenue growth forecast. He described the overall economic and consumer environment as resilient, both in the United States and globally, despite some volume pressures in markets such as Mexico and India. Quincey noted that developed economies performed better in the recent quarter and that Coca-Cola is focusing on value and affordability for lower-income consumers.

The CEO also addressed the impact of tariffs and inflation, stating that the company's largely local production model has helped mitigate significant disruptions. Inflation in the food and beverage sector has moderated, and Coca-Cola's pricing strategies reflect this trend. Looking ahead, Quincey expressed confidence in returning to volume growth in the second half of the year, supported by the company's diverse brand portfolio and global bottling network.

Coca-Cola CEO: The overall picture is broad-based consumer resilience

Coca-Cola topping earnings estimates this morning the company reiterating its full-year organic revenue growth forecast and also making some news around a new Cane sugar drink joining us here first on CNBC is Coca-Cola chairman and CEO James Quincy James Welcome back. Nice to have you on earnings day Thank you. Good to be back So tell us a little bit about what you're seeing because feel feel sort of steady as she goes you kept the revenue guide Intact but volumes were under pressure Yeah, I think that the the overall picture is broad-based Economic and consumer resilience whether it's in the u.s. Or globally, obviously within that there there are some puts and takes We certainly in the second quarter Saw the developed economies doing a bit better than they've done in the first quarter But volume came under pressure for us because some sort of idiosyncratic reasons in in a couple of key markets Mexico in India But overall consumers in good shape and we're delivering on the top line and we're looking forward to a strong second half Consumers in good shape in the u.s. Can you just dive into that a little more? I mean talk about what you're saying because we saw consumer confidence fall at the beginning of the quarter and it's since rebounded How do you assess what's going on? Yeah, look overall. I think the consumer is pretty resilient. The economy's doing well Yes, there is some pressure on the lower-income consumers and they're looking for more value and more affordability options And we're really leaning into that Perhaps the the other thing I would say about consumer confidence I saw a couple of good charts a while ago that says actually Consumers view and confidence in their own incomes is a good predictor of what their real income is going to be going forward But consumer confidence in the economy There's been a divergence between the actual economy's performance and the consumers ability to judge it Well, so I think one thing we have to focus on is what's actually happening And so as we believe that growth will continue into the second half We're gonna lean in and continue to invest and really drive the growth I've just been diving in this morning into how companies are navigating or mitigating is the word du jour Tariffs, how does it impact coca-cola? I know we've talked a little bit about aluminum cans What what are you seeing there? And and and how do you deal with it? Yeah, I mean firstly our business is profoundly a local business So the you know The drinks that we sell in the US are virtually entirely made in the US and that's true of almost every major country you go to As it relates to the US we have some exposure to imported materials a little aluminum from Canada and some agricultural Commodities like orange juice from Brazil But when we look at the impact of tariffs if and when they come in On different places at different times. You have to put it all in the big round You start out any year with a budget you've made a whole load of assumptions and they won't all be right Some will be better Some will be worse and tariffs is a is an extra cost But you've got to look at the underlying price of the commodity that might be down 4x might be favorable to you and when we put all that together We have certainly seen so far as we manage the business in in the u.s That we haven't needed to do any big adjustments so far this year and we're pretty confident We can see the year through managing all the puts and takes So what does that say? So so with that in mind, are you worried about in play is inflation still a thing in the u.s when it comes to beverages Inflation has been moderating in the US and around the world. We we generally in the food and beverage industry There's a kind of an annual price increase cycle which in our case was in the in the first quarter And so you saw pricing go up but at a much lower rate than historically over the last few years So we've definitely seen Inflation moderating down to a more kind of normal level and you know our pricing very much following that Of course, our focus is making sure that the consumers believe they're still getting fair value so we invest in the marketing in the innovation in the Execution because we may very much think we need to earn the price increase and not just think we can take it because costs Are up and very much look to balance volume and pricing and so far I think we've done a good job and not foreseeing other issues in the year. So at this point in time So when do you think we can expect volume growth again? Certainly from a global perspective. We're looking for volume growth in the second half Our model is based on the premise that we can bring more people into our beverage franchises We have a great portfolio of brands 30 billion dollar brands fantastic execution with our bottling system around the world So we'll absolutely be looking to grow Volume in the second half as in fact we have in the first half first half volume growth was one notwithstanding The decline in the second quarter, so we'll be we'll be back to growth and that's one of the things that powers our business

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