Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to reduce soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, fueled by robust global demand for its products, prompting the company to raise its full-year revenue projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter results, highlighting growth in both revenue and operating income amid a shifting market landscape.
Nonetheless, in North America, volume sales fell by 1% during the quarter. Quincey explained that this decline in the U.S. was primarily due to reduced sales in away-from-home channels that cover water, sports drinks, coffee, tea, and sodas. However, the drop was somewhat mitigated by the growth of Fairlife milk and Coca-Cola soda, which ranked first and second in retail sales growth, respectively.
To counterbalance the sales slump, Coca-Cola is collaborating with food chains to integrate its soda into combo meals. Reports indicate that the beverage company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting second-quarter revenues of $12.4 billion, equating to around $0.84 per share. Analysts had predicted revenues of $11.76 billion or roughly $0.81 per share.
Coca-Cola has raised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly opting for products associated with weight loss and healthier lifestyle choices. According to a Gallup poll, younger adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.