In the U.S., the emergence of weight loss medications and non-alcoholic beverage options has prompted consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, buoyed by significant global demand for its products, leading the company to revise its full-year forecast upward.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting substantial growth in revenue and operating income amidst a fluctuating market. However, in North America, the company did see a 1% drop in volume sales during the quarter, primarily attributed to decreased sales in away-from-home channels, which encompass products like water, sports drinks, coffee, tea, and soda.
This volume decline was somewhat mitigated by the success of Fairlife milk and the Coca-Cola beverage itself, which ranked highly in retail sales growth for the quarter. To combat the decline in soda sales, Quincey indicated that Coca-Cola is collaborating with food chains to integrate its products into combo meals, including efforts with McDonald’s to enhance the $5 meal deal featuring a soft drink.
Overall, Coca-Cola exceeded Wall Street’s predictions, reporting $12.4 billion in revenue for the second quarter, translating to around $0.84 per share, surpassing forecasts of $11.76 billion or approximately $0.81 per share according to FactSet.
The company has adjusted its outlook for organic revenue growth to a range of 9% to 10%, improving upon its previous expectation of 8% to 9%. Similarly, Pepsi has also faced challenges in engaging U.S. consumers, who are more inclined towards healthier options and weight loss products. Earlier in July, Pepsi attributed its lackluster second quarter performance to a series of product recalls.