In the United States, the rising popularity of weight loss drugs and non-alcoholic beverages has led to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, boosted by a robust global demand for its products, prompting the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the results, which reflected solid growth in both revenue and operating income amidst a shifting market. However, the North American division experienced a 1% decline in volume sales during the quarter. Quincey noted that this dip was largely due to decreased sales in away-from-home channels, which encompass products like water, sports drinks, coffee, tea, and sodas.
The decline in soda sales was somewhat mitigated by the performance of Fairlife milk and Coca-Cola’s flagship beverage, which ranked first and second in retail sales growth, respectively. To further address the volume drop, the company is collaborating with restaurants to include its sodas in combo meal deals, with specific emphasis on enhancing McDonald’s $5 meal offer that features a soft drink.
Coca-Cola surpassed Wall Street expectations, posting $12.4 billion in revenue for the quarter, translating to earnings of approximately $0.84 per share. Analysts had predicted revenue of $11.76 billion, or about $0.81 per share. As a result of the strong performance, Coca-Cola has raised its forecast for organic revenue growth to between 9% and 10%, up from its previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in appealing to U.S. consumers, who are increasingly opting for healthier options and focusing on weight management. A recent Gallup poll indicated that young adults in the U.S. are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.