Consumers in the U.S. are increasingly avoiding sodas, favoring weight loss medications and non-alcoholic drinks instead.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by robust global demand, leading the company to revise its full-year guidance upwards.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting solid revenue and operating income growth amid a shifting market.
However, in North America, the company saw a 1% decline in volume sales during the quarter. Quincey attributed this decrease to weaker sales in away-from-home channels, which include its products like water, sports drinks, coffee, tea, and sodas.
The decline was somewhat mitigated by strong performances from Fairlife milk and Coca-Cola soda, which ranked first and second in retail sales growth for the quarter.
To address the volume drop, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals. Reports indicate that the company is working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, which translates to approximately $0.84 per share. Analysts had anticipated revenues of $11.76 billion, around $0.81 per share.
The company has updated its forecast for organic revenue growth to between 9% and 10%, increasing its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are gravitating towards healthier options and weight loss products. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.