I Can't Afford My Coke Habit

What's this about Coca-Cola (NYSE: KO  ) prices going up after Labor Day? Look, Coke, you might be overestimating just how addictive your product really is.

Granted, I do have a bad Coke habit -- about eight cans per day (and that doesn't include that venti latte I get every morning from Starbucks (Nasdaq: SBUX  ) ), and getting my daily fix of this delicious, refreshing nectar of the demi-gods is putting a dent in my wallet as it is. I've seen 12-packs of Coke go for more than $5 a pop, and that's already offensive to me.

I already play favorites by trying to go to whichever grocer is having the grandest Coke sale. For example, if Safeway (NYSE: SWY  ) has a “buy two 12-packs, get three free” special, you guessed it -- baby, I'm there. Of course, I'll settle for "buy one, get one free," three for $10, four for $12 ... I'm not too picky, I'm just incredibly averse to paying full price, now more than ever.

So I understand that Coca-Cola Enterprises (NYSE: CCE  ) , the bottler making the decision, may find it prudent to boost flagging business by raising prices. Shareholders may see the logic in the move, too. Of course, logic doesn't always hold up in the harsh light of reality. And the reality is that consumers are really challenged by economic pressures these days, and apparently "declining U.S. soda sales" is one reason for the planned price hike. Huh?

I mean, come on -- at around $3.50 per gallon, folks started trading in gas guzzlers, going compact, and driving less, developments that certainly haven't helped General Motors (NYSE: GM  ) and Ford (NYSE: F  ) . They are also suddenly remembering there's -- wait for it -- water in the tap. I don't think they'll shrug off the skyrocketing price of Coke (in fact, it's pretty clear they've already cut down, likely because of pinched budgets).

If people like me, who scour websites to figure out where Coke's on sale every week, are already trying to limit our financial losses from our silly little habit, there is, of course, the completely rational possibility that some of us hardened addicts might -- gasp -- quit.

I'm thinking raising prices might be a really big strategic mistake -- and this wouldn't be the first time the company’s made what some might even call an idiotic mistake. Anybody who comes up with Coca-Cola Rehab might be onto something.

More carbonated Foolishness:

Starbucks and Coca-Cola are Motley Fool Inside Value selections. Starbucks is a Motley Fool Stock Advisor pick. The Fool owns shares of Starbucks. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool has a disclosure policy.


Read/Post Comments (8) | Recommend This Article (14)

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  • Report this Comment On July 18, 2008, at 10:31 AM, pondee619 wrote:

    "If people like me, who scour websites to figure out where Coke's on sale every week..."

    If you are working THAT hard to get your fix, you'll pay up when you have to.

  • Report this Comment On July 18, 2008, at 11:39 AM, edsmarduk wrote:

    I am sure that Safeway will have a comparable generic brand, like they did with Dr. Skipper, and you will be back down to half price again soon.

  • Report this Comment On July 18, 2008, at 12:10 PM, pokneetail wrote:

    Don't forget, Coke is very much made from CORN syrup. Corn, a commodity whose price is probably rising just as fast as gasoline and other groceries, is also part of the energy crunch as more and more goes to ethanol.

    It's the same corn that makes people and cattle alike overweight. It'll be a medical miracle when people can't afford Coke and beef.

  • Report this Comment On July 18, 2008, at 12:39 PM, TMFLomax wrote:

    pokneetail -- actually thanks for the reminder, I forgot to mention my Coke habit is actually a DIET Coke habit, haha! Regular Coke is way too sweet for me. I have been wondering if a lot of companies may have to switch back to sugar from the high-fructose corn syrup with commodity prices going the way they have been -- so yes I think that's a very valid point.

    Thanks for the comments, everybody!

    Alyce

  • Report this Comment On July 18, 2008, at 3:00 PM, TrailerParkJawa wrote:

    I have a Coke habit too although its not as bad as yours. I also like Dr Pepper quite a bit. Under normal circumstances I'm 2-3 can a day person. However, I never really pay attention to prices since I usually get my soda's from work or at lunch.

    Last summer I went to Cancun and must say that Mexican coke made from sugar cane is SO MUCH better. There is bottling plan in Texas that makes Dr Pepper with cane sugar but I haven't gotten around to ordering some.

    Back to the cost, I've tried to cut down on soda not so much because of cost but more for health. But if the price gets too high then perhaps I'll modify my purchases.

    I don't think I'll get generic sodas cause they typcially dont do it for me as as a replacement. I'll just do with less.

  • Report this Comment On July 24, 2008, at 5:28 PM, sicem1981 wrote:

    The plant is in Waco, halfway between Dallas and Austin off of I35. As a Baylor grad and DP fiend I've been to the DP Museum often. I only drink DP and of course Coke Zero. I wish the people at Dr. Pepper could come up with somethin like coke zero. That would be huge.

  • Report this Comment On July 24, 2008, at 8:28 PM, TMFLomax wrote:

    Actually, yes, I'm a Diet Dr. Pepper fan, too -- I was inspired by the Dr. Pepper posts here and picked up some Diet Dr. Pepper to offset my Coke habit. (They were on sale, too.) Haha...

    Thanks for all the comments, everyone!

    Alyce

  • Report this Comment On July 27, 2008, at 8:42 AM, TMFMarlowe wrote:

    Alyce, I switched to iced tea years ago. Not the bottled stuff -- I buy high-quality tea and brew it myself, in gallon-sized batches. It's delicious, much healthier than all that gut-rotting phosphoric acid and corn syrup, and cheaper to boot. Give it a try!

    John

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