In the United States, the rise of weight loss medications and non-alcoholic beverages is causing consumers to rethink their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, attributed in part to high global demand for its carbonated drinks, leading the company to revise its full-year outlook upward.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second quarter results, highlighting solid growth in revenue and operating income despite a shifting market environment. However, the company’s volume sales in North America saw a 1% decline during the quarter. Quincey noted that this decrease was primarily due to weaker performance in away-from-home channels, which encompass various beverages including water, sports drinks, coffee, tea, and soda.
The decline in volume was partially offset by the success of Fairlife milk and Coca-Cola’s flagship product, which ranked first and second respectively in retail sales growth for the period. To mitigate the downturn, Coca-Cola is collaborating with food chains to include its sodas in combo meals, particularly with McDonald’s to enhance their $5 meal deal featuring a soft drink.
Coca-Cola’s performance exceeded Wall Street expectations, with the company reporting $12.4 billion in revenue during the second quarter, equivalent to approximately $0.84 per share. Analysts had projected revenues of $11.76 billion, or about $0.81 per share. As a result, Coca-Cola revised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers who are increasingly focusing on healthier options. The company reported a subdued second quarter, attributing part of this to a series of product recalls.