Consumers in the U.S. are turning to weight loss drugs and non-alcoholic beverages, causing a slowdown in soda sales. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand for its products, which led the company to enhance its full-year forecast.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting solid growth in revenue and operating income amid a changing market. However, the North American market experienced a 1% decline in volume sales, attributed to a decrease in “away-from-home channels,” which encompasses water, sports drinks, coffee, tea, and soda.
The decline was partially mitigated by success in Fairlife milk products and Coca-Cola itself, which ranked first and second in retail sales growth, respectively. To counteract the volume loss, Quincey mentioned partnerships with food chains to include Coca-Cola beverages in combo meals, with efforts underway with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Overall, the company’s performance exceeded Wall Street projections, reporting $12.4 billion in revenue, which translates to about $0.84 per share. Analysts had anticipated earnings of $11.76 billion, or around $0.81 per share.
Coca-Cola has updated its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%. Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are increasingly leaning towards healthier choices, and it recently cited product recalls as a factor in its underwhelming second-quarter performance.