Coca-Cola (KO.N) increased its annual organic sales and profit predictions on Tuesday, indicating that consumers are prepared to pay more for the beverage giant’s higher-priced sodas, energy drinks, and juices, particularly in international markets. The company’s shares surged about 1% in premarket trade, as it reported a surprising boost in quarterly revenue.

Coca-Cola is expanding into new regions in Asia and Europe to maintain revenue growth and introducing reformulated products like Coke Spiced and Georgia Coffee in price-sensitive countries.

The average selling price jumped by 9% in the second quarter, according to Sprite, while unit case volumes increased by 2%. Coca-Cola, on the other hand, saw volumes in North America dip by 1% as customers remained cautious about their spending.

In July, Ramon Laguarta, CEO of PepsiCo (PEP.O), stated that price sensitivity extends beyond low-income consumers in the United States.

PepsiCo, based in New York, failed second-quarter revenue projections due to repeated price increases and competition from private-label brands, resulting in lower sales of its snacks and sodas, primarily in the United States. Coca-Cola expects organic sales to reach between 9% and 10% in fiscal 2024, up from its previous prediction of 8% to 9%.

The business expects adjusted profit to reach between 5% and 6% in fiscal 2024, up from a previous prediction of 4% to 5%. Coca-Cola’s second-quarter net revenue increased 2.9% to $12.31 billion, exceeding LSEG’s expectation of $11.76 billion. On an adjusted basis, the business earned 84 cents per share, compared to expectations of 81 cents.

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