In the U.S., the rise of weight loss medications and non-alcoholic alternatives has led consumers to delay purchasing sodas. Despite this trend, Coca-Cola announced strong second-quarter earnings, bolstered by significant global demand for its beverage products, prompting the company to raise its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid growth in both revenue and operating income amid a dynamic market environment. However, the company did report a 1% decline in volume sales in North America during the same period. Quincey attributed this decrease largely to softness in away-from-home channels, which encompass products such as water, sports drinks, coffee, tea, and sodas.
This volume drop was somewhat mitigated by the success of Coca-Cola’s Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter. To counteract the decline, Quincey revealed that Coca-Cola is collaborating with fast-food chains to incorporate its sodas into combo meals. Specifically, Coca-Cola is working with McDonald’s to enhance the appeal of its $5 meal deal, which also includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s forecasts, reporting $12.4 billion in revenue, or about $0.84 per share, surpassing analysts’ expectations of $11.76 billion in revenue and roughly $0.81 per share. The company has also updated its forecast for organic revenue growth to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Pepsi, meanwhile, has faced challenges in attracting U.S. consumers who are increasingly favoring products focused on weight loss and healthier choices. A Gallup poll suggests that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.