Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic beverages, which has contributed to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, indicating a global demand boost for its beverage lineup, leading the company to raise its full-year outlook.
James Quincey, Coca-Cola’s CEO, expressed optimism about the results, noting the company’s solid growth in both revenue and operating income amid changing market conditions.
However, the North American sector saw a 1% decline in volume sales during the same quarter. Quincey attributed this decrease to a softening in away-from-home channels, which encompasses their offerings in water, sports drinks, coffee, tea, and sodas.
The downturn was somewhat mitigated by the strong performance of Fairlife milk and Coca-Cola’s flagship soft drink, which ranked first and second in retail sales growth for the quarter.
To counteract the volume dip, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals. Reports suggest plans with McDonald’s to promote the fast food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or around $0.81 per share.
The company has adjusted its forecast for organic revenue growth to a range of 9% to 10%, an increase from the previous estimate of 8% to 9%.
Pepsi, similarly, faces challenges in capturing U.S. consumer interest, as there is a noticeable shift towards products aimed at dietary health and weight management. Recent reports also highlighted that Pepsi’s subdued second-quarter performance was partly due to several product recalls.