Consumers in the United States are increasingly opting for weight loss drugs and non-alcoholic beverages, which has led to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by global demand for its products, and has raised its expectations for the year.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid revenue and operating income growth in challenging market conditions. However, the company did experience a 1% decline in volume sales in North America during the quarter, attributed to weaker performance in away-from-home channels, such as water, sports drinks, coffee, tea, and soda.
To mitigate the decline, Coca-Cola is collaborating with food chains to include its beverages in combo meals. The company is reportedly working with McDonald’s to enhance the fast food chain’s $5 meal deal, which features a soft drink.
Despite the sales dip, Coca-Cola exceeded market expectations with a reported revenue of $12.4 billion for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated $11.76 billion in revenue, or about $0.81 per share. The company has revised its organic revenue growth forecast to a range of 9% to 10%, up from its earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in appealing to U.S. consumers, who are gravitating towards weight loss products and healthier lifestyle choices. Pepsi attributed its disappointing second-quarter results to a series of product recalls.