Weight loss medications and non-alcoholic beverage options have led consumers in the U.S. to reduce their soda purchases.
Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, buoyed by high global demand for its beverages, prompting the company to raise its full-year outlook.
“We are pleased with our second-quarter results, which showed solid top-line and operating income growth in a dynamic market,” stated James Quincey, CEO of Coca-Cola.
Nevertheless, in North America, volume sales fell by 1% this quarter. Quincey explained during the earnings call that the decline in the U.S. was due to lackluster performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
This decline was somewhat countered by sales of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter.
To mitigate the drop in sales, Quincey mentioned that Coca-Cola is partnering with food chains to include its sodas in combo meals. The company is reportedly collaborating with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, amounting to about $0.84 per share. Analysts had anticipated that Coca-Cola would achieve revenue of $11.76 billion, or approximately $0.81 per share.
The company now forecasts organic revenue growth of 9% to 10%, an increase from its earlier prediction of 8% to 9%.
Similar to Coca-Cola, Pepsi is facing challenges in engaging U.S. consumers, who are increasingly gravitating towards products focused on weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.