Consumers in the U.S. are increasingly delaying 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, bolstered by global demand for its beverage products, which led the company to raise its full-year revenue outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that the second-quarter results showed solid growth in both revenue and operating income amidst a shifting market. However, the company did experience a 1% decline in volume sales in North America, attributed to weaker demand in away-from-home channels, including soda, coffee, tea, sports drinks, and bottled water.
Despite the drop in volume sales, Coca-Cola’s Fairlife milk product and its iconic soda, Coke, performed well, ranking first and second in retail sales growth, respectively. To address the sales decline, Coca-Cola is collaborating with food chains like McDonald’s to incorporate its beverages into combo meal deals.
In financial terms, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, or approximately $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are leaning towards healthier options and weight loss products. A recent Gallup poll indicated that young adults in the U.S. are significantly reducing their alcohol intake. In early July, Pepsi attributed a lackluster second quarter to various product recalls.