Weight loss medications and non-alcoholic beverages have led to reduced soda consumption among consumers in the U.S.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by robust global demand for its beverages. The company also raised its full-year guidance following these results.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting solid revenue and operating income growth. However, volume sales in North America saw a decline of 1% during the quarter due to “softness in away-from-home channels,” which includes water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To counter the sales drop, the company is collaborating with food chains to integrate its soda into combo meals, including working with McDonald’s on enhancing its $5 meal deal that features a soft drink.
Coca-Cola outperformed Wall Street expectations with reported revenues of $12.4 billion for the second quarter, translating to earnings of approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion, or around $0.81 per share.
Looking ahead, the company now anticipates organic revenue growth of 9% to 10%, revising its earlier estimate of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are increasingly focused on healthier lifestyles and weight loss. The company noted that a series of product recalls contributed to its lackluster performance in the second quarter.