Consumer preferences for weight loss drugs and non-alcoholic beverages are leading to decreased soda sales in the U.S.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by significant global demand for its products. Consequently, the company has raised its full-year financial guidance.
Coca-Cola CEO James Quincey expressed optimism about the quarterly results, highlighting solid revenue and operating income growth in a rapidly evolving market.
However, in North America, the company experienced a 1% decline in volume sales during the quarter. Quincey noted that this decrease was largely due to lower sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
This decline was somewhat mitigated by the performance of Fairlife milk and Coca-Cola itself, which saw strong retail sales growth.
To counter the downturn, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals, including a partnership with McDonald’s to enhance its $5 meal deal.
Despite these challenges, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue or approximately $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share.
The company has also updated its revenue growth outlook, now forecasting an increase of 9% to 10%, up from the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, has faced difficulties in engaging U.S. consumers who are increasingly favoring products focused on weight loss and healthier choices. Recent data indicates that young adults in the U.S. are consuming less alcohol than in previous years. Earlier in July, Pepsi cited product recalls as a contributing factor to its lackluster second-quarter results.