In the United States, the rise of weight loss medications and non-alcoholic drink alternatives is impacting soda sales, with consumers becoming more hesitant to purchase traditional soft drinks.
Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by high global demand for its beverage products, which led the company to increase its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting that they achieved solid growth in both revenue and operating income during the quarter amidst a shifting market landscape.
However, the North American market saw a 1% decline in volume sales. Quincey pointed out that this decrease was mainly due to weaker performance in channels focused on away-from-home consumption, which includes bottled water, sports drinks, coffee, tea, and sodas.
To mitigate this decline, the company highlighted that its Fairlife milk brand and its Coke products performed well, ranking first and second in retail sales growth for the quarter.
Coca-Cola is seeking to enhance its sales strategy by collaborating with food chains to include its beverages in combo meal deals. Reports indicate that the beverage maker is working with McDonald’s to improve its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the quarter, equating to approximately $0.84 per share, surpassing the forecast of $11.76 billion, or about $0.81 per share.
The company has raised its forecast for organic revenue growth to between 9% and 10%, an increase from the earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in gaining traction with U.S. consumers amid a growing preference for products that support weight loss and healthier lifestyles. Recent polling indicates that younger adults are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.