Drink Positive

Image source: EQRoy - Shutterstock

What's going on?

Coca-Cola posted better-than-expected quarterly earnings on Monday, and its refreshing to see that demand for the soda if nothing else is back to normal.

What does this mean?

With the vaccination rollout in overdrive and restaurant reopenings underway, the worlds finally started emerging parched and bleary-eyed from their homes. And Cokes been waiting for them with an ice-cold beverage in hand: the giant sold the same number of drinks last quarter as it did the same time last year, making it the first time since the coronavirus outbreak that sales didnt drop. By March, in fact, those sales were back to 2019 levels. Investors had a pretty good feeling about Cokes chances, but theyd still steeled themselves for some drop-off and when it didnt arrive, they sent the companys share price higher.

Why should I care?

Zooming out: Do you prefer Pepsi or Coke?


Arch-rival Pepsi reported better-than-expected results of its own last week, but its had an easier time of it than Coke: the companys big snacks business has benefited from homebound comfort eaters, and it sells more of its drinks in grocery stores than Coke does. Those roles, then, should reverse once going out replaces staying in so much so that analysts think Cokes sales will grow 1.5 times faster than Pepsis this year.



The bigger picture: A savings boom could unleash a spending boom.


Household incomes have, generally speaking, been protected from the worst of the pandemic-driven slump by canny government schemes. Combine that with fewer spending options recently, and its no surprise that folks around the world have stockpiled an extra $5.4 trillion in savings since March last year. Even if they only spend a third of that now businesses are reopening, it could boost global growth by 2% both this year and next (tweet this).

Originally posted as part of the Finimize daily email.

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