In the U.S., consumers are increasingly influenced by weight loss medications and non-alcoholic drink options, causing a slowdown in soda purchases.
Despite this trend, Coca-Cola reported strong second-quarter earnings, driven by robust global demand for its beverages, leading the company to adjust its full-year revenue guidance upward. CEO James Quincey expressed satisfaction with the results, highlighting solid topline and operating income growth in a dynamic market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during this period. Quincey attributed this decrease to “softness in away-from-home channels,” affecting categories like water, sports drinks, coffee, tea, and soda. The decline was somewhat mitigated by increased sales of Fairlife milk products and Coke itself, which ranked first and second in retail sales growth, respectively.
To counteract the downturn, Coca-Cola is collaborating with food chains to integrate its soda products into combo meals. The company is reportedly partnering with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street forecasts, reporting revenue of $12.4 billion and earnings of approximately $0.84 per share, surpassing predictions of $11.76 billion and $0.81 per share. The company has now increased its outlook for organic revenue growth to a range of 9% to 10%, up from the earlier forecast of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging U.S. consumers, who are shifting towards healthier choices and weigh-loss products. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.