Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to be more cautious about purchasing sodas.
Despite this trend, Coca-Cola reported solid earnings for the second quarter, largely due to robust global demand for its beverage products, which allowed the company to increase its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting significant growth in both revenue and operating income amidst a changing market environment.
However, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to weaker performance in away-from-home channels, which encompass its offerings in water, sports drinks, coffee, tea, and soda.
This decline was somewhat mitigated by the success of Fairlife milk and its flagship beverage, Coke, which ranked highly in retail sales growth. To further combat the decrease, Coca-Cola is partnering with restaurant chains to integrate its soda into combo meal deals, including collaboration with McDonald’s to enhance the appeal of its $5 meal deal, which features a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. This exceeded predictions of $11.76 billion in revenue and $0.81 per share.
The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from the earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly opting for products that emphasize weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi cited a series of product recalls as a factor contributing to its lackluster performance in the second quarter.