In the United States, weight loss medications and non-alcoholic beverages are causing consumers to delay soda purchases. Despite this trend, Coca-Cola has reported strong earnings for the second quarter, fueled by robust global demand for its beverage products. This success prompted the company to raise its full-year outlook.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in revenue and operating income amid changing market conditions.
However, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey noted that this drop was largely due to reduced consumer activity in away-from-home settings, which encompasses products such as water, sports drinks, coffee, tea, and sodas. The decline was somewhat offset by the popularity of Fairlife milk and the Coca-Cola brand itself, which ranked among the top performers in retail sales growth.
To counteract the decline in sales, Quincey mentioned that Coca-Cola is collaborating with food chains to include its products in combo meals. Reports indicate that the company is partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal, which features a soft drink.
Despite the challenges, Coca-Cola surpassed analysts’ expectations, reporting revenue of $12.4 billion, translating to about $0.84 per share. Analysts had anticipated the company would generate $11.76 billion in revenue, or approximately $0.81 per share.
Looking ahead, Coca-Cola has revised its forecast for organic revenue growth, now estimating an increase between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi has struggled to engage American consumers, who are increasingly opting for weight loss-focused and healthier products. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster performance in the second quarter to a series of product recalls.