Coca-Cola is about to cost you more — thanks to Trump's tariffs

Have a Coke and a… frown?

President Donald Trump and millions of others are about to find that their soft drink of choice is going to become a little more expensive — thanks in part to the commander in chief's tariffs.

Coca-Cola CEO James Quincey announced this week that rising costs were driving an unusual mid-year need to raise prices to consumers. The reason is "the freight, the metals, the steel, the aluminum going up, the labor going up," he said during a CNBC interview. He directly mentioned tariffs to the Wall Street Journal.

It wasn't long ago — March, in fact — that Commerce Secretary Wilbur Ross predicted no major impact on consumers from steel and aluminum tariffs.

Ross held up a can of Coke while defending the use of tariffs. "Here's a can of Coca-Cola," Ross said. "Coca-Cola has three cents of aluminum in it. If that goes up 10 percent, that's three-tenths of a percent. I just paid $1.49 for this can of Coke. It doesn't mean anything. So all this hysteria has a lot to do about nothing."

He did something similar at the time with a can of Campbell's Chicken Noodle Soup, noting that a 25 percent tariff on steel would add just six-tenths of a cent in cost. In a May earnings call, a Campbell executive blamed steel tariffs for problems with future profitability. 

RELATED: Take a look at the Stock Market after Trump announced the new tariffs: 

16 PHOTOS
Dow falls over 700 points after Trump announces China tariff plan
See Gallery
Dow falls over 700 points after Trump announces China tariff plan
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid
The Dow Jones Industrial Average is displayed on a screen after the closing bell, over the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid
Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid
The Dow Jones Industrial Average is displayed on a screen after the closing bell, over the floor of the New York Stock Exchange, (NYSE) in New York, U.S., March 22, 2018. REUTERS/Brendan McDermid
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: A trader works at his desk on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: A monitor displays the day's final numbers on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
NEW YORK, NY - MARCH 22: Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the closing bell, March 22, 2018 in New York City. The Dow Jones industrial average closed down more than 700 points on Thursday afternoon. Markets reacted to the Trump administration� announcement of approximately $50 billion worth of yearly tariffs on Chinese imports. (Photo by Drew Angerer/Getty Images)
HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

 

And now it's Coke, correcting the record.

While the cost increase of one single can may seem negligible, it adds up over the tremendous volume a company like Coca-Cola sees. Looking at the malted beverage sector, according to the Beer Institute, more than 5,000 active breweries in the U.S. last year bought 36 billion aluminum cans and bottles, with the aluminum being the largest single input cost for the can.

"I wonder if that's the case with a can of Coke?" said Jeff Inman, professor of marketing and business administration at the University of Pittsburgh, to NBC News. "If I was Coke, I'd say that information out there about aluminum being a fraction of the price of a can is false. It's, boom, some number. On top of that we're experiencing increased fuel costs. Those are all plausible justifications."

However, it's impossible to tell from the outside how much the company's costs are increasing. "This will allow the drink companies to lock in additional profits for the foreseeable future without the usual incremental price increases," said Robin Lee Allen, managing partner for private equity firm Esperance.

Not that the company is hurting. In its second quarter earnings announcement, Coca-Cola said that unit case volume was up 2 percent, year over year, with Coca-Cola brand beverages leading the increase. Earnings per share were up 68 percent.

The Twitterverse, meanwhile, had its own opinions on the impact of Trump's tariffs, with many noting that the fast food-loving president seemed to be inadvertently supporting a shift in public health policy by making sugary sodas more expensive. 

Read Full Story

Markets

DJIA 25,565.48 403.07 1.60%
NASDAQ 7,809.02 34.90 0.45%
NIKKEI 225 22,192.04 -12.18 -0.05%
HANG SENG 27,100.06 -223.53 -0.82%
DAX 12,237.17 74.16 0.61%
USD (per EUR) 1.14 0.00 0.25%
USD (per CHF) 1.00 0.00 0.37%
JPY (per USD) 110.89 0.32 0.29%
GBP (per USD) 1.27 0.00 0.20%