In the United States, consumers are increasingly turning to weight loss medications and non-alcoholic beverages, which has impacted soda sales. However, Coca-Cola reported strong second-quarter earnings on Tuesday, citing robust global demand for its beverages, which led the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that they achieved solid growth in both revenue and operating income despite the evolving market conditions.
In North America, volume sales dipped by 1% during the quarter. Quincey attributed the decline in the U.S. segment to a decrease in “away-from-home channels,” affecting their water, sports drinks, coffee, tea, and soda categories. Nevertheless, Coca-Cola’s Fairlife milk and its flagship Coke brand posted strong retail sales growth, ranking first and second, respectively.
To counteract the sales decline, Quincey mentioned that Coca-Cola is collaborating with food chains to incorporate their sodas into combo meals. The company is reportedly working with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street predictions with second-quarter revenues of $12.4 billion, translating to approximately $0.84 per share. Analysts had anticipated revenues of about $11.76 billion, or roughly $0.81 per share.
The company has revised its forecast for organic revenue growth to a range of 9% to 10%, an increase from the previous estimate of 8% to 9%.
Pepsi is facing similar challenges in attracting U.S. consumers, who are gravitating towards products that emphasize weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second quarter to several product recalls.