Consumers in the U.S. are refraining from purchasing sodas due to the popularity of weight loss medications and non-alcoholic alternatives. Nevertheless, Coca-Cola reported strong earnings for the second quarter, buoyed by high global demand for its beverages, leading the company to update its annual revenue forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that the results demonstrate solid top-line and operating income growth in a continually evolving market.
Despite Coca-Cola’s overall success, the company experienced a 1% decline in volume sales in North America during this quarter. Quincey attributed this drop to a decrease in “away-from-home channels,” which include products like water, sports drinks, coffee, tea, and soda.
The reduced sales were partially offset by strong performances from Coca-Cola’s Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth, respectively.
To counteract the decline, Coca-Cola is collaborating with food chains to incorporate its soda into combo meal offerings. Reports indicate that the company is partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. In comparison, Wall Street had anticipated revenues of $11.76 billion, or about $0.81 per share.
The company has raised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers, who are gravitating towards products that promote weight loss and healthier lifestyles. A recent Gallup poll highlighted a significant reduction in alcohol consumption among young adults in the U.S. Earlier this month, Pepsi cited a series of product recalls as factors for its disappointing performance in the second quarter.