Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss medications and non-alcoholic beverage options.
Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by robust global demand, which led the company to revise its full-year outlook positively. CEO James Quincey expressed satisfaction with the company’s performance, highlighting solid growth in both revenue and operating income amid a shifting market landscape.
In North America, however, the company experienced a 1% decline in volume sales this quarter. Quincey attributed this decrease to “softness in away-from-home channels,” which encompass products such as water, sports drinks, coffee, tea, and sodas. Some of the decline was mitigated by growth in Fairlife milk and Coke itself, which ranked among the top beverages in retail sales growth for the quarter.
To address the dip in sales, Coca-Cola is collaborating with food chains to include its sodas in meal promotions. Notably, the company is working with McDonald’s to enhance the appeal of its $5 meal deal, which features a soft drink.
Coca-Cola exceeded Wall Street expectations by reporting $12.4 billion in revenue, translating to earnings of about $0.84 per share. Analysts had anticipated revenue of $11.76 billion or roughly $0.81 per share.
The company has adjusted its forecast for organic revenue growth to a range of 9% to 10%, up from an earlier estimate of 8% to 9%.
Pepsi, much like Coca-Cola, is facing challenges in attracting U.S. consumers who are favoring healthier options and weight loss solutions. In July, Pepsi cited multiple product recalls as a factor contributing to its subdued performance in the second quarter.