Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss medications and non-alcoholic alternatives. Despite this environment, Coca-Cola reported strong second-quarter earnings, fueled by robust global demand for its beverages, leading the company to raise its full-year outlook.
Coca-Cola CEO James Quincey expressed optimism about the company’s solid growth in revenue and operating income amid changing market dynamics. However, North America saw a 1% decline in volume sales for the quarter. Quincey pointed to “softness in away-from-home channels,” which includes water, sports drinks, coffee, tea, and sodas, as a factor in the U.S. division’s downturn.
Despite the overall decline, sales of Fairlife milk and Coca-Cola itself helped to mitigate the drop. Quincey noted that the company is collaborating with food chains to incorporate soda into combo meal deals, with a particular focus on enhancing McDonald’s $5 meal deal to include a soft drink.
Coca-Cola exceeded Wall Street predictions, reporting $12.4 billion in revenue, or approximately $0.84 per share, compared to the forecast of $11.76 billion and $0.81 per share. The company now anticipates organic revenue growth between 9% and 10%, adjusting its earlier prediction of 8% to 9%.
Pepsi, like Coca-Cola, is also facing challenges in attracting U.S. consumers amid a shift toward healthier lifestyle choices. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.