In the United States, the rise of weight loss drugs and non-alcoholic beverages has led to a decrease in soda consumption. Nevertheless, Coca-Cola reported strong earnings for the second quarter, benefiting from high global demand, which led the company to increase its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that they experienced solid growth in both revenue and operating income despite a shifting market landscape.
However, the North American market saw a 1% decline in volume sales during the quarter. Quincey attributed this decrease to weaker performance in “away-from-home channels,” which encompasses products like water, sports drinks, coffee, tea, and sodas.
The decline in volume was somewhat balanced by growth in Coca-Cola’s Fairlife milk and its classic soda, which saw strong retail sales during the quarter.
To counteract the decline, Coca-Cola is collaborating with food chains to incorporate its soda into combo meals. Reports indicate that the company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, translating to earnings of approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, or $0.81 per share.
Coca-Cola has adjusted its forecast for organic revenue growth, now predicting a range of 9% to 10%, an increase from its earlier estimate of 8% to 9%.
In a similar vein, Pepsi has faced challenges attracting U.S. consumers, who are leaning more towards weight loss products and healthier lifestyle choices. Additionally, Pepsi cited a number of product recalls as contributing factors to its lackluster performance in the second quarter.