Expecting an eventual ease in the cost of commodities, Dr Pepper Snapple will increase prices modestly in 2012, according to the Wall Street Journal. Dr Pepper President and CEO Larry Young anticipates that the company will raise prices by 1.5 to 2 percent next year and believes that the rising swell in the cost of commodities will subside.
The news will likely come as a relief to consumers who saw a spike in the prices of popular beverages this year as consistently rising costs of key commodities like sugar and petroleum forced Dr Pepper and its chief rivals, Coke and Pepsi, to increase prices despite holding the line in past years. Consumers appear to be resisting higher priced drinks with Nielsen data showing sales volume of major brands slumping and lower-cost private labels gaining a greater share of the market in recent weeks.
Young noted that consumers are still getting used to higher prices in beverage categories that previously had a low point of entry.
“We’re going to have a period where we figure out the elasticity [to higher prices].” Young told the Journal.