In the United States, weight loss medications and non-alcoholic beverage options are causing consumers to reduce their soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, attributing part of its success to robust global demand for its beverages, which led the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s results, highlighting significant growth in revenue and operating income amid a rapidly changing market. However, in North America, the company’s volume sales decreased by 1% in the quarter. Quincey indicated that this decline in the U.S. market was mainly due to weaker sales in away-from-home channels, which encompass their water, sports, coffee, tea, and soda lines.
The decline in volume was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second for retail sales growth during the quarter. To counteract the volume drop, Coca-Cola is collaborating with fast-food chains to include its sodas in combo meals. Notably, the company is working with McDonald’s to enhance their $5 meal deal, which features a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion or about $0.81 per share. The company has now raised its forecast for organic revenue growth to a range of 9% to 10%, an increase from the earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly gravitating towards products focused on weight loss and healthier choices. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in previous years. In July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.