In the United States, consumer interest in weight loss medications and non-alcoholic beverages is affecting soda sales. Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by robust global demand for its beverages, prompting the company to raise its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed the downturn to a decrease in sales across “away-from-home channels,” which encompasses water, sports drinks, coffee, tea, and soda products.
To mitigate the sales drop, Coca-Cola noted that the decline was somewhat counterbalanced by its Fairlife milk products and the continued popularity of Coke, which secured the top two spots in retail sales growth during the period.
Coca-Cola is also collaborating with fast-food chains to incorporate its drinks into meal deals. Reports suggest that the company is working with McDonald’s to enhance its $5 meal deal, which comes with a soft drink.
Despite the challenges, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the quarter, equating to approximately $0.84 per share. Analysts had predicted revenue of around $11.76 billion, or about $0.81 per share.
Looking ahead, Coca-Cola has raised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Similarly, PepsiCo is facing difficulties in appealing to U.S. consumers who are focusing on healthier lifestyle choices. This shift in consumer preferences, particularly among younger adults, has led to decreased alcohol consumption as well, as indicated by a Gallup poll. Earlier in July, Pepsi cited various product recalls as a factor for its lackluster performance during the second quarter.