In the United States, the popularity of weight loss drugs and non-alcoholic beverages has led consumers to cut back on soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, boosted by solid global demand for its products, which has prompted the company to raise its full-year outlook.
James Quincey, Coca-Cola’s CEO, expressed optimism about the company’s performance, highlighting the robust growth in revenue and operating income in a rapidly changing market.
Nevertheless, the company’s volume sales in North America fell by 1% during the quarter. Quincey attributed this decline to a decrease in sales within “away-from-home channels,” including water, sports drinks, coffee, tea, and sodas.
To mitigate the impact of declining sales, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals, including a partnership with McDonald’s to enhance the fast-food chain’s $5 meal deal, which features a soft drink.
Overall, Coca-Cola outperformed Wall Street’s expectations, reporting $12.4 billion in revenue and earnings of about $0.84 per share. Analysts had predicted revenues of $11.76 billion and earnings of around $0.81 per share.
The company has also revised its forecast for organic revenue growth, now expecting an increase between 9% and 10%, up from an earlier prediction of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier choices. A Gallup poll noted a significant decline in alcohol consumption among young adults in the U.S. Earlier this month, Pepsi cited a series of product recalls as a factor contributing to its disappointing second-quarter results.