Consumer preferences are shifting towards weight loss drugs and non-alcoholic alternatives, leading to a slowdown in soda purchases in the United States. Despite this trend, Coca-Cola reported strong earnings for the second quarter of the year, driven by solid global demand for its beverages, resulting in an increase in its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting substantial growth in both revenue and operating income amid changing market conditions. However, the company experienced a 1% decline in volume sales in North America, attributed mainly to softer demand in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
To mitigate this drop, Coca-Cola is collaborating with food chains to incorporate its products into combo meals. Notably, partnerships with McDonald’s are aimed at enhancing the fast food chain’s value meal options that include a soft drink.
Despite the volume decline, Coca-Cola’s second quarter revenue reached $12.4 billion, exceeding Wall Street expectations of $11.76 billion. The company now anticipates organic revenue growth of 9% to 10%, revising its earlier estimate of 8% to 9%.
Pepsi also faces challenges as U.S. consumers gravitate towards healthier choices. The company reported a lackluster second quarter, citing product recalls as a contributing factor to its struggles in appealing to the market.