Weight loss medications and non-alcoholic beverage options are leading U.S. consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely due to robust global demand for its beverages. The company has increased its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting significant growth in both revenue and operating income amidst a shifting market landscape.
However, there was a 1% decrease in volume sales in North America during the quarter. Quincey pointed out that this decline in the U.S. resulted from reduced sales in channels outside the home, particularly affecting water, sports drinks, coffee, tea, and sodas.
This downturn was somewhat countered by the success of Fairlife milk and the Coca-Cola brand itself, which saw significant retail sales growth. To combat the sales decline, the company is collaborating with fast-food chains, like McDonald’s, to incorporate its sodas into combo meal deals.
Coca-Cola surpassed Wall Street’s expectations with second-quarter revenues of $12.4 billion, equating to approximately $0.84 per share. Analysts had projected revenues of $11.76 billion, or about $0.81 per share.
The company has now raised its forecast for organic revenue growth to between 9% and 10%, up from the earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing market interest among U.S. consumers, who are increasingly leaning towards products that promote weight loss and healthier lifestyles. A Gallup poll has indicated that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.