Weight loss medications and non-alcoholic drink options are prompting U.S. consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, supported by high global demand for its beverages, which led the company to increase its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in both revenue and operating income amidst a shifting market. However, he noted a 1% decline in volume sales in North America, attributing this decrease to weaker sales in away-from-home channels, including water, sports drinks, coffee, tea, and sodas.
To counteract the decline, Coca-Cola is focusing on enhancing its soda’s presence in combo meal offerings at food chains, including collaborations with McDonald’s to promote its $5 meal deal that features a soft drink.
Despite the volume decline, Coca-Cola outperformed Wall Street expectations, reporting revenue of $12.4 billion for the quarter, equivalent to approximately $0.84 per share. Analysts had anticipated $11.76 billion in revenue and earnings of roughly $0.81 per share.
The company now projects organic revenue growth of 9% to 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly prioritizing weight loss and healthier lifestyle choices. A recent Gallup poll indicates that young adults in the U.S. are drinking significantly less alcohol than before. In early July, Pepsi attributed its lackluster second-quarter results to multiple recalls affecting its products.