Consumers in the U.S. are increasingly delaying their soda purchases due to the rise of weight loss drugs and non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong earnings for the second quarter, bolstered by solid global demand for its beverage offerings, leading the company to revise its full-year forecast upwards.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting a significant increase in topline and operating income amid a shifting market. However, North America’s volume sales saw a 1% dip during the quarter. Quincey attributed this decline to reduced sales in out-of-home venues, including restaurants and cafes, which affected their wide range of products from water to soda.
The company noted that the decline was partially mitigated by the success of its Fairlife milk and its flagship Coca-Cola, which ranked highly in retail sales growth during the quarter. To counteract the downturn, Coca-Cola is collaborating with fast-food chains to integrate its products into value meals, particularly with McDonald’s to enhance its $5 meal deal.
Overall, Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street estimates of $11.76 billion. The company now anticipates organic revenue growth of 9% to 10%, a revision from its previous forecast of 8% to 9%.
Pepsi, similarly, has encountered challenges in attracting U.S. consumers who are opting for healthier alternatives. The company cited product recalls as a contributing factor to its lackluster second quarter results.