The company will raise prices to offset the higher costs of raw materials

Coca-Cola will raise the prices of its drinks to combat the impact of higher commodity costs, its CEO told CNBC on Monday.

The beverage company joins several other consumer giants, such as Kimberly-Clark and JM Smucker, in hiking prices. While the measure will help its profit margins, it may come at the expense of consumers with cash problems who are still struggling with the economic impact of the coronavirus pandemic.

“We’re well covered on the 21st, but there’s accumulated pressure for the 22nd, and so there will have to be some price increases,” James Quincey, general manager, told CNBC’s Sara Eisen in Squawk on Street”.

“We intend to manage them intelligently, thinking about how we use package sizes and really optimize prices for consumers,” he added.

Throughout the crisis, Coca-Cola shifted its production to focus on larger bulk packaging to attract consumers who spent more time at home and stocking up at the grocery store. But before the pandemic, Coca-Cola and its rival PepsiCo had been pushing smaller cans and bottles, which typically carry a higher price per ounce for the consumer and are more profitable for the manufacturer. Pepsi executives said Thursday they expect smaller containers to return as the crisis subsides.

Quincey did not reveal which Coca-Cola products would have higher prices. The company last announced a price hike in 2018, citing the impact of aluminum tariffs under President Donald Trump’s administration.

Coca-Cola shares rose less than 1% in morning trading after the company reported its first-quarter results. Coke’s revenue and earnings exceeded Wall Street estimates, and the company said demand in March reached pre-pandemic levels. However, executives stressed that the company is experiencing an uneven global recovery.