Consumer preferences for weight loss medications and non-alcoholic beverages are leading to a decline in soda purchases in the United States.
Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by robust global demand for its products, which enabled the company to raise its full-year forecasts.
Coca-Cola CEO James Quincey expressed optimism about the company’s results, noting solid revenue and operating income growth amidst shifting market conditions.
However, in North America, the company experienced a 1% drop in volume sales during the second quarter. Quincey attributed this decline to weaker performance in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
The decline was partially mitigated by growth in Coca-Cola’s Fairlife milk line and its flagship soda, Coke, which saw significant retail sales growth. To further counterbalance the downturn, Coca-Cola is collaborating with restaurant chains to integrate its soda options into combo meals, including efforts with McDonald’s to enhance its $5 meal deal that features a soft drink.
Overall, Coca-Cola surpassed analysts’ expectations by generating $12.4 billion in revenue, equating to approximately $0.84 per share, while forecasts predicted $11.76 billion in revenue.
The company has now revised its organic revenue growth forecast to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in capturing the attention of U.S. consumers, who are increasingly opting for products that support weight loss and healthier lifestyles. In July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.