Coca-Cola is navigating changing consumer preferences, as weight loss drugs and non-alcoholic options lead many U.S. consumers to reduce soda purchases. Despite this trend, the beverage giant reported strong second-quarter earnings, driven by robust global demand for its carbonated drinks, prompting an increase in its full-year forecast.
James Quincey, CEO of Coca-Cola, commented on the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.” However, the company did see a 1% decline in volume sales in North America, attributed to reduced demand in away-from-home channels, which comprise its beverages, including water, sports drinks, coffee, tea, and soda.
To temper this decline, Coca-Cola noted that its Fairlife milk and its flagship product, Coke, experienced strong retail sales growth. Quincey announced that the company is collaborating with food chains to integrate its sodas into combo meals, including a partnership with McDonald’s to enhance its $5 meal deal, which comes with a soft drink.
In financial terms, Coca-Cola exceeded analysts’ expectations in the second quarter, achieving $12.4 billion in revenue, translating to approximately $0.84 per share, compared to the anticipated $11.76 billion and $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are shifting towards weight loss and healthier product options. The beverage company attributed its lackluster second quarter to several product recalls.