In the United States, consumers are increasingly opting for weight loss medications and non-alcoholic alternatives, leading to a decline in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by significant global demand for its carbonated beverages. This prompted the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the results, highlighting notable growth in both revenue and operating income amid a shifting market landscape. However, the company did experience a 1% drop in volume sales in North America, which Quincey attributed to weaker sales in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
The decline was somewhat mitigated by the success of Fairlife milk and the popularity of Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To counterbalance the volume decrease, Coca-Cola is collaborating with food chains to include its drinks in combo meal offerings. Notably, the beverage giant is partnering with McDonald’s on enhancing the fast-food chain’s $5 meal deal with a soda option.
Overall, Coca-Cola exceeded Wall Street expectations with second-quarter revenues of $12.4 billion, translating to about $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or approximately $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Meanwhile, Pepsi is also feeling the effects of shifting consumer preferences, with many opting for healthier options aimed at weight loss. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.