Recent trends in weight loss medications and a rise in non-alcoholic beverage options have led to a decrease in soda consumption among U.S. consumers. Despite this, Coca-Cola reported strong earnings for the second quarter, buoyed by consistent global demand for its products. The company has consequently raised its full-year revenue forecast.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the company’s performance, highlighting robust growth in both revenue and operating income amid changing market conditions. However, the company experienced a 1% decline in volume sales in North America during the quarter, primarily due to weaker sales in channels where drinks are consumed away from home, which include water, sports drinks, coffee, tea, and sodas.
This decline was somewhat balanced out by the success of its Fairlife milk line and Coca-Cola’s classic soda, both of which ranked highly in retail sales growth during the quarter. To counteract the overall drop in soda volume, Coca-Cola is collaborating with fast-food chains, including McDonald’s, to incorporate its beverages into combo meals, which could help drive sales.
The company’s earnings report revealed revenues of $12.4 billion, surpassing Wall Street expectations of $11.76 billion. As a result, Coca-Cola has adjusted its forecast for organic revenue growth, now expecting an increase of between 9% and 10%, an improvement over its earlier prediction of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers, who are increasingly drawn to healthier products and weight loss options. Earlier this month, Pepsi cited a series of product recalls as a factor contributing to its lackluster performance in the second quarter.