Weight loss medications and the rise of non-alcoholic alternatives have led to a decline in soda purchases among U.S. consumers. Despite this trend, Coca-Cola reported strong earnings for the second quarter, bolstered by global demand for its beverages, prompting the company to raise its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter results, highlighting solid growth in both revenue and operating income amidst a shifting market landscape. However, in North America, the company saw a 1% drop in volume sales during the quarter, attributed to a decrease in away-from-home consumption, which includes categories like water, sports drinks, coffee, tea, and soda.
This decline was somewhat mitigated by strong performance from Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth during this period. To counteract the volume decline, Coca-Cola is collaborating with fast-food chains to incorporate its soda into combo meal offers. Notably, the company is working with McDonald’s to enhance the appeal of its $5 meal deal that includes a soft drink.
Coca-Cola’s results surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to earnings of approximately $0.84 per share, exceeding forecasts of $11.76 billion in revenue and earnings of about $0.81 per share. The company has adjusted its outlook, now anticipating organic revenue growth in the range of 9% to 10%, up from an earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing the interest of U.S. consumers who are increasingly focused on weight loss and healthier lifestyles. In early July, Pepsi attributed its muted performance in the second quarter to a series of product recalls.