Weight loss medications and non-alcoholic alternatives are leading consumers in the United States to reduce their soda consumption.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, attributing its success to high global demand for its beverages. The company has raised its full-year projections as a result.
Coca-Cola’s CEO, James Quincey, expressed optimism about the quarter’s performance, highlighting strong revenue and operating income in a changing market.
However, in North America, volume sales fell by 1% during the same period. Quincey explained that the decline in the U.S. division was due to less demand in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The decrease was partially mitigated by the popularity of Fairlife milk and the Coca-Cola brand soda, which ranked first and second in retail sales growth, respectively.
To counter the decline, Coca-Cola is collaborating with restaurant chains to include its soda in combo meals. Reports indicate that the company is partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal, which incorporates a soft drink.
Overall, Coca-Cola exceeded Wall Street’s projections, reporting revenue of $12.4 billion for the second quarter, or approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or about $0.81 per share.
The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similar to Coca-Cola, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly favoring products that promote weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.