Weight loss medications and non-alcoholic alternatives have led to a decrease in soda purchases among U.S. consumers.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by solid global demand for its beverages. This performance prompted the company to raise its outlook for the entire year.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter results, which showed significant growth in revenue and operating income despite a shifting market.
However, the company noted a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to “softness in away-from-home channels,” affecting products like water, sports drinks, coffee, tea, and sodas.
To mitigate the impact of the sales decline, the company highlighted the success of its Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth, respectively, during the quarter.
Coca-Cola is also collaborating with fast-food chains to integrate its sodas into combo meals. Reports suggest that the company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Despite the challenges, Coca-Cola surpassed Wall Street’s expectations. The company reported $12.4 billion in revenue, equivalent to about $0.84 per share, while forecasts had anticipated revenue of $11.76 billion at approximately $0.81 per share.
Coca-Cola has now raised its forecast for organic revenue growth, projecting an increase between 9% and 10%, up from the previous estimate of 8% to 9%.
Like Coca-Cola, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly gravitating toward products that emphasize weight loss and health-conscious choices. Following a series of product recalls, Pepsi reported a lackluster second quarter.