Weight loss medications and the rise of non-alcoholic alternatives have led to a decrease in soda purchases among U.S. consumers. Despite this trend, Coca-Cola announced strong earnings for the second quarter, buoyed by global demand for its beverages, prompting the company to increase its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about 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, in North America, the company did experience a 1% decline in volume sales, attributed to reduced activity in consumer interactions away from home, which includes their offerings in water, sports drinks, coffee, tea, and soda.
This decline was partially mitigated by strong sales of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail growth for the quarter. To counteract the volume drop, Coca-Cola is collaborating with food chains, such as McDonald’s, to include its sodas in combo meals, enhancing the appeal of meal deals.
Coca-Cola exceeded Wall Street expectations, reporting revenues of $12.4 billion for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, or about $0.81 per share, according to FactSet.
The company now anticipates organic revenue growth of between 9% and 10%, an increase from its earlier projection of 8% to 9%. Meanwhile, Pepsi is facing similar challenges in capturing consumer interest as more people are gravitating towards weight loss and healthier options. Pepsi has cited product recalls as a factor in its subdued second-quarter performance.