In the United States, weight loss medications and non-alcoholic alternatives have led consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by high global demand for its beverages, prompting the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the quarter’s performance, highlighting significant growth in both revenue and operating income amid a changing market landscape.
However, Coca-Cola experienced a 1% decline in volume sales within North America during this quarter. Quincey noted that this dip was primarily due to a decrease in sales from “away-from-home channels,” where products such as water, sports drinks, coffee, tea, and sodas are sold.
The decline was somewhat mitigated by the success of its Fairlife milk brand and the enduring popularity of its flagship product, Coca-Cola, which ranked first and second in retail sales growth, respectively.
To combat the volume decrease, the company is collaborating with food chains to incorporate its sodas into combo meals. Notably, Coca-Cola is working with McDonald’s to enhance the fast food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola outperformed analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, which translates to approximately $0.84 per share. This exceeded the anticipated $11.76 billion in revenue, or around $0.81 per share.
The company has revised its forecast, now predicting organic revenue growth between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting the U.S. consumer market, which is increasingly shifting towards weight loss-focused products and healthier lifestyle choices. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.