US Economy

Coca-Cola CEO warns that lifting coronavirus lockdowns on US businesses might not stick

Key Points
  • Coca-Cola CEO James Quincey said Tuesday that easing restrictions on businesses during the coronavirus pandemic needs to be done gradually.
  • "We shouldn't assume that each step forward is permanent necessarily," Quincey said on CNBC's "Squawk on the Street." 
  • Quincey noted that Japan and Singapore have had to adjust their approaches to the virus after new cases began to surge.
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Coca-Cola CEO warns that lifting coronavirus lockdowns on US businesses might not stick

Coca-Cola Chairman and CEO James Quincey said Tuesday that easing restrictions on business during the coronavirus pandemic needs to be done with an understanding it may not last. 

"We shouldn't assume that each step forward is permanent necessarily," Quincey said on CNBC's "Squawk on the Street." 

People must recognize that the economic restart must be done in phases, Quincey said, "and also be cognizant that there could be steps backward in some countries as the virus flares up again." 

Quincey noted that Japan and Singapore have had to adjust their approaches to the virus after new cases began to surge. "Japan has had to lock down a little harder. Singapore has had to go back more into lockdown," he said. 

Quincey's comments Tuesday came shortly after the beverage giant released its first-quarter earnings.

The company benefited in that period from consumers stocking up on products in response to stay-at-home orders, but warned it expects a "material" impact in the second quarter due to movie theater and restaurant closures. 

Coca-Cola, with its global footprint, knows the recovery from the coronavirus "will be a winding path," Quincey said. 

"We're going to have to manage each country. We're going to have to move our learnings around as a Coke system," he said. 

Shares of Coke were down about 1.5% on Tuesday to around $45 each. 

The state of Georgia, where Coke is headquartered, on Monday announced plans to lift restrictions on many businesses.

Tattoo parlors, gyms and hair salons can reopen on Friday, as long as they follow social distancing and sanitary requirements, while restaurants can begin to offer restricted dine-in meals on Monday.

Drawing on Coke's experience in countries that have eased restrictions, Quincey said, "clearly you see there are groups of consumers that when the door is open they'll come and reengage with the world on those terms." 

Others are more cautious and continue to try avoiding "channels and locations where you congregate until they see more clearly the virus has dissipated," he said. 

In Georgia, specifically, Quincey said he had "no expectation there's going to be a snap back to normal on Friday or Monday morning." 

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Coca-Cola CEO James Quincey on Q1 earnings, coronavirus business impact and more