In the United States, the rise of weight loss medications and non-alcoholic beverage options is causing a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, attributing its success to significant global demand for its beverages, prompting the company to increase its full-year projections.
James Quincey, Coca-Cola’s CEO, expressed optimism about the company’s second-quarter performance, highlighting robust growth in both sales and operating income amidst a constantly changing market.
However, North America experienced a 1% decline in volume sales during the quarter. Quincey attributed this dip to decreased performance in “away-from-home channels,” which encompass various products including water, sports drinks, coffee, tea, and soda.
This downturn was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which recorded substantial retail sales growth. To counteract the volume decline further, Quincey mentioned initiatives to partner with food chains, such as McDonald’s, to integrate Coca-Cola beverages into combo meal offerings, aiming to enhance the visibility and sales of their products.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, exceeding Wall Street expectations which had forecasted $11.76 billion. The company reported earnings of about $0.84 per share, surpassing the anticipated $0.81 per share.
Looking ahead, Coca-Cola raised its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly focused on healthier options and weight loss products. Young adults are reported to be consuming less alcohol, contributing to this shift in behavior. In early July, Pepsi cited a series of product recalls as contributing factors to its underwhelming performance during the second quarter.