Consumers in the U.S. are increasingly delaying soda purchases due to the availability of weight loss medications and non-alcoholic alternatives. This has created a challenge for beverage companies; however, Coca-Cola reported strong second-quarter earnings, bolstered by strong global demand, leading the company to raise its full-year outlook.
Coca-Cola CEO James Quincey expressed optimism about the second-quarter results, noting the company’s solid revenue growth despite a fluctuating market. Nonetheless, the North American division experienced a 1% drop in volume sales, attributed to weaker performance in channels such as bars and restaurants, which encompass water, sports drinks, coffee, tea, and soda.
While the overall volume fell, Coca-Cola’s Fairlife milk and its popular soda products helped mitigate the decline. The company is collaborating with fast-food chains like McDonald’s to integrate soda into combo meal offerings, aiming to boost sales.
In terms of financial performance, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, equating to approximately $0.84 a share. Analysts had anticipated revenue of $11.76 billion, or around $0.81 a share.
The company has raised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous projection of 8% to 9%.
Pepsi is facing similar challenges as it attempts to engage U.S. consumers, many of whom are shifting their focus towards healthier choices and weight management products. Earlier in July, Pepsi cited product recalls as a factor contributing to its lackluster second-quarter performance.