In the U.S., weight loss medications and non-alcoholic alternatives are leading consumers to reduce their soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, largely due to global demand for its products, resulting in the company raising its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid growth in revenue and operating income during a period of market shifts. However, the company reported a 1% decline in volume sales in North America, attributing this downturn to lower sales in “away-from-home channels,” encompassing water, sports drinks, coffee, tea, and soda.
The decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola, which ranked first and second in retail sales growth respectively. To counteract the sales drop, Quincey mentioned efforts to collaborate with food chains to include Coca-Cola products in combo meal deals, specifically noting a partnership with McDonald’s to enhance its $5 meal offering that includes a soft drink.
Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or approximately $0.81 per share. The company now projects organic revenue growth between 9% and 10%, an increase from its earlier forecast of 8% to 9%.
Similarly, Pepsi has been facing challenges in engaging U.S. consumers, who are increasingly opting for weight loss products and healthier choices. Recent data suggests that young adults are consuming significantly less alcohol than before, according to a Gallup poll. In early July, Pepsi cited multiple recalls as a reason for its lackluster performance in the second quarter.