Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported impressive second-quarter earnings, buoyed by strong global demand for its products, leading the company to raise its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting significant growth in revenue and operating income amid a changing market landscape. However, volume sales in North America saw a decline of 1% during the quarter. Quincey attributed this drop to reduced sales in “away-from-home channels” such as restaurants and cafés, which includes water, sports drinks, coffee, tea, and soda.
The decline in volume was somewhat mitigated by sales from Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth, respectively. To counter the downturn, Coca-Cola is collaborating with fast food chains to incorporate its beverages into meal deals. Reports indicate that the company is working with McDonald’s to enhance the value of its $5 meal deal, which comes with a soft drink.
Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had predicted revenue of approximately $11.76 billion, or around $0.81 per share. The company now projects organic revenue growth between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are shifting towards health-conscious products. In early July, the company cited a series of recalls as a factor contributing to its subdued second-quarter performance.