In the United States, the increasing popularity of weight loss medications and non-alcoholic beverages has led consumers to reduce their soda purchases.
Despite these trends, Coca-Cola announced strong second-quarter earnings, buoyed by robust global demand for its beverage offerings, prompting the company to upgrade its full-year projections. CEO James Quincey expressed optimism about the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, in North America, Coca-Cola experienced a 1% decline in volume sales during the quarter. Quincey noted that the downturn in the U.S. market was influenced by weaker sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
The decline was somewhat countered by the popularity of Fairlife milk and Coke, which ranked first and second in retail sales growth during the quarter. To mitigate the volume drop, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals. Reports indicate that 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 exceeded Wall Street forecasts with second-quarter revenues reaching $12.4 billion, translating to about $0.84 per share. Analysts had predicted revenues of $11.76 billion, or approximately $0.81 per share.
The company now anticipates organic revenue growth of 9% to 10%, adjusting its earlier estimate of 8% to 9%.
Similarly, Pepsi is facing difficulties in attracting U.S. consumers, who are increasingly opting for products that promote weight loss and healthier lifestyles. According to a Gallup survey, young adults in the U.S. are consuming significantly less alcohol than in previous years. Earlier in July, Pepsi attributed its weaker second-quarter performance to a series of product recalls.