Pricing Strategy and Margin Outlook
Q: How will pricing and margins evolve given inflation trends?
A: Management noted that only half of the 11% price/mix growth in North America was due to actual price increases; the other half was mix effects from higher-priced products like fairlife and juices growing faster. " They expect the mix effect to subside in the back half of the year, leading to more normalized pricing. " With inflation approaching the "landing zone," they anticipate future pricing to be earned through marketing, innovation, and execution rather than inflation-driven increases. " Gross margins benefited slightly from stocking, adding tens of basis points, but overall margin trends are expected to remain similar in the second half of the year. "

Volume Growth Expectations
Q: What is the outlook for volume growth versus pricing?
A: The company aims for balanced growth with revenue growth of 4–6%, targeting the 5–6% range through a mix of 2–3% volume growth and 2–3% price/mix. " In the short term, they expect slightly more price and slightly less volume due to inflation trends. " Positive volume growth is driven by developing economies like Latin America, India, and Africa, while North America and Europe face some softness. "

Cash Flow and Capital Allocation
Q: How will fairlife and tax payments impact cash flow?
A: The company is managing upcoming outflows, including the fairlife acquisition and an IRS tax payment, through a combination of cash from operations, proceeds from refranchising, and the issuance of long-term debt. " The balance sheet remains strong with a clear line of sight into needs for the next 12–18 months. " They continue to invest in the business and support the dividend while addressing these obligations. "

North America Performance
Q: What are the trends in North America consumer spending and price/mix?
A: Consumer sentiment is strong and resilient, with some softness in away-from-home channels due to lower traffic and value-seeking behavior among lower-income consumers. " The company saw strong growth across the portfolio, including Coca-Cola Trademark, fairlife, Topo Chico, and juices, winning value share in the quarter. " Only half of the 11% price/mix growth was due to actual pricing; the rest was mix from higher-priced products. "

Latin America Performance
Q: What drove strong results in Latin America?
A: Latin America had strong volume momentum, driven by Mexico and Brazil, with broad-based category success including Coca-Cola Trademark and 20% volume growth in Coke Zero. " The price/mix was heavily affected by Argentina's high inflation, which accounted for two-thirds of the price/mix growth. " Excluding Argentina, price/mix was around 6% in other countries. "

Away-from-Home Channel Trends
Q: How is the away-from-home business performing and what's the outlook?
A: The softness in away-from-home channels is a slow softening rather than a big deceleration. " Lower-income consumers are making fewer trips and seeking value deals. " The company is focusing on affordability and price-pack architecture to provide value offerings and retain consumers in this channel. "

Energy and Sports Drinks Performance
Q: How are energy and sports drink categories performing?
A: In North America, Coca-Cola and fairlife were the top trademarks providing the most dollar retail growth in Q2. " The sports drink category is improving, with positive volume growth in BODYARMOR and Powerade, and new innovations like Zero Sugar and Flash I.V.. " In energy drinks, category growth has slowed in the U.S. due to new entrants and innovations, but internationally, energy drinks continue to show robust growth. "

Concentrate Shipments and Margins
Q: How did concentrate shipments impact margins, and will this continue?
A: Concentrate shipments were affected by events like the ingestion in the Red Sea, restocking after floods in Brazil, and stocking up in India. " This led to a slight benefit to gross and operating margins in the tens of basis points. " The company expects a more normal relationship between unit cases and concentrate shipments in the second half of the year. "

Refranchising and EPS Impact
Q: What's the timing and EPS impact of bottler refranchising?
A: The company is not providing specific dates but expects to complete most refranchising efforts over the next couple of years. " While refranchising can have a mechanical impact on EPS due to dilution, management believes it benefits the overall system and aligns with their focus on core competencies. "

Marketing Investment Intentions
Q: Has there been a change in marketing investment plans?
A: The company's bias is to invest where they see opportunities. " There's no radical change in marketing investment intentions, and they continue to see the need for marketing support to drive the top line. "

Europe and EMEA Performance
Q: What are the trends in Western Europe and EMEA?
A: Europe is not performing as well as desired, with more pressure on away-from-home channels in the West. " Sporting events have helped, but weather challenges and lower-income consumers seeking value have impacted performance. " Africa had a strong quarter with good volume growth and value share gains. " The Middle East faces headwinds due to ongoing conflict. "

Asia Pacific Performance and China
Q: How did Asia Pacific perform, and what's happening in China?
A: Asia Pacific volumes were up 3%, with price/mix down 3% due to mix effects. " India had a strong double-digit volume growth after a soft first quarter. " In China, overall volumes were negative due to the deprioritization of unprofitable case-pack water. " Sparkling volumes in China were slightly positive. "

Category Dynamics in North America
Q: Any notable category trends in North America?
A: Sparkling beverages are performing better than energy drinks as a sector. " The company is focusing on multiple brands to meet consumer needs and responding to category evolution with partners like Monster. " The sports drink category is showing improvement with product innovations and marketing efforts. "

Energy Drinks Weakness in the U.S.
Q: What is causing weakness in the U.S. energy drink market?
A: New entrants and innovations are changing the category dynamics, leading to slowed growth for established brands. " The company is working with Monster to respond to consumer evolution and is seeing robust growth in energy drinks internationally. "