Weight loss drugs and non-alcoholic alternatives are causing U.S. consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, benefiting from solid global demand for its beverages, which led the company to revise its full-year forecast upward.
Coca-Cola’s CEO, James Quincey, expressed enthusiasm about the company’s performance, highlighting a notable growth in revenue and operating income in a dynamic market. Nevertheless, the company experienced a 1% decline in volume sales in North America, which Quincey attributed to weaker performance in away-from-home channels, such as water, sports drinks, coffee, tea, and sodas.
To soften the blow from declining soda sales, Coca-Cola’s Fairlife milk product and its flagship Coke brand ranked first and second in retail sales growth during the quarter. Quincey mentioned efforts to collaborate with food chains, particularly McDonald’s, to include Coca-Cola products in combo meal deals.
In financial terms, Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street’s expectations of $11.76 billion. The company reported earnings of about $0.84 per share, compared to the anticipated $0.81 per share.
Looking ahead, Coca-Cola now expects its organic revenue growth to be in the range of 9% to 10%, an increase from its previous projection of 8% to 9%.
Pepsi, on the other hand, has faced challenges in appealing to American consumers who are increasingly favoring weight loss products and healthier lifestyle choices. Recent trends show younger adults in the U.S. consuming less alcohol. In July, Pepsi attributed its underwhelming second quarter to a series of product recalls.