In the U.S., consumers are delaying soda purchases due to the rise of weight loss medications and non-alcoholic alternatives. Nevertheless, Coca-Cola announced strong second-quarter earnings, fueled by global demand for its beverages, leading the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that they experienced solid growth in revenue and operating income despite the challenging market conditions.
However, in North America, Coca-Cola’s volume sales dipped 1% during the quarter. Quincey noted that this decline in the U.S. was mainly due to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
The company mentioned that this drop was somewhat mitigated by sales from Fairlife milk and Coca-Cola itself, which ranked first and second in retail growth for the quarter, respectively.
To counter the decline, Coca-Cola is collaborating with fast-food restaurants to incorporate its soda into combo meal deals. Reports suggest the company is partnering with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola surpassed analysts’ expectations, recording $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted the company would earn about $11.76 billion, or roughly $0.81 per share.
Coca-Cola has adjusted its forecast for organic revenue growth to a range of 9% to 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in retaining the interest of U.S. consumers, who are increasingly inclined towards products that promote weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its weaker second quarter to several product recalls.