Weight loss medications and non-alcoholic choices have led U.S. consumers to reduce soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, driven by solid global demand, which prompted the company to elevate its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant revenue and operating income growth amid a shifting market.
However, in North America, volume sales declined by 1% in the quarter. Quincey attributed this decrease to “softness in away-from-home channels,” which encompass products like water, sports drinks, coffee, tea, and soda.
This drop in sales was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which achieved the highest retail sales growth in their category during the quarter.
To counteract the decline, Quincey noted that Coca-Cola is partnering with food chains to include its soda in combo meals, specifically collaborating with McDonald’s to enhance the fast-food chain’s $5 meal deal that features a soft drink.
Overall, Coca-Cola’s performance exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the quarter, or approximately $0.84 per share, surpassing forecasts of $11.76 billion and $0.81 per share.
The company also revised its forecast for organic revenue growth, indicating an expected increase of 9% to 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging U.S. consumers, who are increasingly focused on weight loss and healthier lifestyles. Additionally, in early July, Pepsi attributed its subdued second-quarter results to a series of product recalls.