In the United States, the popularity of weight loss drugs and non-alcoholic beverages is impacting soda sales. Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by robust global demand for its products, prompting the company to increase its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid topline and operating income growth during a challenging market. However, the North American division experienced a 1% decline in volume sales due to reduced demand in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
This decline was partly countered by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked highest and second in retail sales growth, respectively. To combat the downturn, the company is collaborating with fast food chains, specifically McDonald’s, to integrate its sodas into combo meal deals.
Coca-Cola exceeded Wall Street’s expectations with second-quarter revenues of $12.4 billion, translating to approximately $0.84 per share. Analysts had anticipated $11.76 billion in revenue, around $0.81 per share. As a result, Coca-Cola raised its forecast for organic revenue growth to between 9% and 10%, up from the previous projection of 8% to 9%.
Similarly, Pepsi faces challenges in attracting U.S. consumers, who are increasingly favoring products that promote weight loss and healthier lifestyles. A recent Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. Pepsi cited a series of recalls as a reason for its lackluster performance in the second quarter.