Americans’ growing focus on weight loss drugs and non-alcoholic drink alternatives has led to a decline in soda purchases in the U.S.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, supported by robust global demand for its beverages, which has prompted the company to increase its full-year revenue guidance.
James Quincey, Coca-Cola’s CEO, expressed optimism about the company’s performance, noting that they experienced solid growth in revenue and operating income amid a shifting market landscape.
However, the company’s volume sales in North America fell by 1% during the quarter. Quincey pointed out that the decline was attributed to weaker sales in away-from-home channels, which encompass products like water, sports drinks, coffee, tea, and soda.
Coca-Cola indicated that this downturn was partly offset by strong sales of its Fairlife milk products and its flagship soda, Coke, which performed well in retail growth rankings.
To counteract the sales decline, Quincey mentioned that Coca-Cola is collaborating with food chains to incorporate its sodas into combo meal deals. The company is reportedly working with McDonald’s to enhance the fast food chain’s $5 meal offering, which includes a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations in the second quarter, reporting revenues of $12.4 billion, equating to approximately $0.84 per share, while Wall Street had projected $11.76 billion in revenue, or about $0.81 per share, according to FactSet.
The company also revised its forecast for organic revenue growth to between 9% and 10%, up from its earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in engaging U.S. consumers, who are increasingly leaning towards products that emphasize weight loss and healthier living. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.