In the United States, the emergence of weight loss medications and the popularity of non-alcoholic alternatives have led to a decrease in soda consumption. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, fueled by solid global demand for its beverage offerings, prompting the company to elevate 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 top-line and operating income growth in an ever-changing landscape.”
However, the company did experience a decline in volume sales in North America, which fell by 1% during the quarter. Quincey attributed this decrease to “softness in away-from-home channels,” covering its water, sports, coffee, tea, and soda products.
The drop in sales was partly balanced by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To combat the sales decline, the company is collaborating with food chains to incorporate its sodas into combo meals, with efforts reportedly underway with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, or about $0.84 per share. Analysts had predicted revenue of approximately $11.76 billion, or around $0.81 per share, according to FactSet.
The company has also revised its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
In a similar vein, Pepsi has faced challenges in engaging U.S. consumers, who are increasingly leaning towards products that emphasize weight loss and healthier lifestyles. A recent Gallup poll indicated that young adults in the U.S. are consuming significantly less alcohol than before. Earlier in July, Pepsi attributed its disappointing second-quarter results to a series of product recalls.