In the U.S., consumers are holding back on soda purchases due to the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, which spurred the company to raise its full-year financial outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid growth in revenue and operating income amidst a fluctuating market. However, in North America, volume sales slipped by 1% during the quarter. Quincey explained that this decline stemmed from reduced demand in away-from-home categories, affecting its portfolio, including water, sports drinks, coffee, tea, and soda.
To mitigate the volume drop, Coca-Cola pointed to its Fairlife milk and flagship product, Coke, which demonstrated significant retail sales growth. Quincey indicated that the company is collaborating with food service chains to integrate soda into combo meals, specifically working with McDonald’s to enhance its $5 meal deal inclusive of a soft drink.
Despite the volume decline in North America, Coca-Cola outperformed expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, or about $0.81 per share.
Coca-Cola has also revised its forecast for organic revenue growth, now expecting an increase between 9% and 10%, up from a previous estimate of 8% to 9%. Similarly, Pepsi has faced challenges in capturing U.S. consumers’ attention, who are increasingly leaning towards healthier options and weight loss-focused products. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.