Weight loss medications and increased interest in non-alcoholic alternatives have led U.S. consumers to reduce their soda purchases.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by global demand for its beverages, prompting the company to update its full-year expectations. CEO James Quincey expressed optimism about the company’s performance, which showed significant growth in both revenue and operating income during a challenging market.
In North America, however, Coca-Cola experienced a 1% decline in volume sales over the quarter. Quincey noted that this drop was attributable to weaker sales in away-from-home venues, which encompass products such as water, sports drinks, coffee, tea, and soda. This decline was somewhat balanced by successful sales of its Fairlife milk and Coca-Cola soda, which ranked first and second in retail sales growth, respectively.
To mitigate the decline, Coca-Cola is collaborating with food chains to integrate its soda into combo meals. Reports indicate that the company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which comes with a soft drink.
Overall, Coca-Cola surpassed Wall Street’s predictions in its second-quarter report, generating $12.4 billion in revenue, equating to approximately $0.84 per share. Analysts had expected the company to bring in around $11.76 billion, or about $0.81 per share.
The company has now revised its forecast for organic revenue growth, projecting an increase between 9% and 10%, an improvement from its earlier estimate of 8% to 9%.
Pepsi is facing similar challenges in capturing the interest of U.S. consumers, who are increasingly opting for products that emphasize weight loss and healthier lifestyles. A recent Gallup poll indicates that younger adults in the U.S. are significantly reducing their alcohol consumption. In early July, Pepsi attributed its lackluster performance in the second quarter to a series of product recalls.