What's going on?

Coca-Cola reported sparkling quarterly results on Monday.

What does this mean?

Consumer staples companies like Coca-Cola sell products that folk tend to buy come hell or high water. So even though this year feels like the former, the beverage firm�s results were heavenly. Coca-Cola coughed up more for raw materials and shipping, sure, but it pulled up prices to help plug the gap. And soft-drink aficionados were willing to spend big on the sweet stuff: they guzzled the drink, especially at public venues like restaurants and events. So even though the firm�s drinks were 11% more expensive on average, Coca-Cola sold 3% more. Tumblers were likely switched for champagne glasses in the boardroom: the company�s revenue and profit both smashed through expectations.

Why should I care?

The bigger picture: Buffett�s beverage.
Mind you, Coca-Cola must�ve done something right besides simply being a consumer staple. After all, Procter and Gamble�s results last week revealed slipping demand, despite the firm boasting expectation-beating results. There will be a, ahem, secret formula to the beverage firm�s success, for sure, but one key ingredient will be its dominance in the carbonated drinks industry, with only PepsiCo keeping it company. Add on its world-famous brand and a dependable dividend, and it�s no wonder why Warren Buffett�s long been a fan of the fizzy stuff.�

For markets: PepsiOhNo.
Still, Coca-Cola�s stock has only crawled up 2% this year, languishing far below the S&P 500�s 8% pick-up ��and rival PepsiCo�s in the same boat. There might be a couple of reasons for that. For one, the sector�s trading at a valuation around 25% higher than its historical average, so it�s far from a bargain. And for another, safety-seeking investors have a whole bunch of lower risk, higher yield alternatives now that interest rates are floating higher.