Consumers in the U.S. are increasingly delaying soda purchases, influenced by the rise of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola announced strong earnings for the second quarter, driven by robust global demand for its beverages, leading the company to revise its full-year projections upward.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in both revenue and operating income. However, the North American market saw a 1% decline in volume sales, attributed to softness in away-from-home channels, which encompass its water, sports, coffee, tea, and soda products.
Coca-Cola noted that the volume decline was partially mitigated by sales in its Fairlife milk line and its flagship soda, Coke, which ranked high in retail sales growth. To counteract the decline, Quincey mentioned efforts to integrate Coca-Cola products into combo meal offerings at fast-food outlets, specifically citing collaboration with McDonald’s on its $5 meal deal that includes a soft drink.
Coca-Cola surpassed Wall Street expectations by reporting revenue of $12.4 billion for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or about $0.81 per share. Following this performance, the company has adjusted its forecast for organic revenue growth to between 9% and 10%, increasing its earlier estimate of 8% to 9%.
Similarly, Pepsi appears to be facing challenges in appealing to U.S. consumers, who are shifting towards weight loss-focused and healthier lifestyle products. A Gallup poll noted a decrease in alcohol consumption among young adults in the U.S. Additionally, Pepsi cited several product recalls as a factor in its disappointing second-quarter results earlier this month.