Weight loss medications and non-alcoholic drink options are causing consumers in the United States to cut back on soda purchases.
Despite these trends, Coca-Cola reported strong earnings for the second quarter, supported by solid global demand for its beverage products, which led the company to raise its full-year projections. Coca-Cola CEO James Quincey expressed optimism about the results, highlighting significant growth in top-line and operating income amid a shifting market.
However, the company did experience a 1% decline in volume sales in North America during the quarter. Quincey explained that the softness in sales was due to reduced demand in away-from-home settings, impacting their water, sports drinks, coffee, tea, and soda categories. This decline was somewhat mitigated by the popularity of Fairlife milk and Coca-Cola’s own products, which ranked first and second in retail sales growth.
To counteract the volume decrease, Coca-Cola is collaborating with food chains to include its soda in combination meals. The company is reportedly partnering with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Coca-Cola exceeded Wall Street projections, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share. The company has now increased its forecast for organic revenue growth from 8-9% to a range of 9-10%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers as more people shift towards products that promote weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.