Recent trends involving weight loss medications and non-alcoholic beverages have led consumers in the U.S. to reduce their soda purchases. Despite this shift, Coca-Cola reported strong earnings for the second quarter, bolstered by solid global demand for its products, prompting the company to enhance its full-year projections.
Coca-Cola’s CEO James Quincey expressed optimism about the second-quarter results, noting significant growth in both revenue and operating income amid changing market conditions. However, the company did experience a 1% decline in volume sales in North America during the quarter, attributed to a slowdown in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The decline was somewhat mitigated by success with Fairlife milk and Coca-Cola’s own products, which ranked highly in retail sales growth. To counteract the volume drop, Coca-Cola is collaborating with fast-food chains, including McDonald’s, to integrate its sodas into combo meal offerings.
Ultimately, Coca-Cola surpassed Wall Street projections for the quarter, reporting $12.4 billion in revenue, or approximately $0.84 per share, exceeding forecasts of $11.76 billion and $0.81 per share. The company is now estimating organic revenue growth between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in gaining consumer interest in the U.S., where a trend towards weight loss and healthier choices is evident. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.