In the United States, the trend toward weight loss drugs and non-alcoholic beverages is leading consumers to reduce their soda purchases.
Despite this trend, Coca-Cola reported impressive second-quarter results on Tuesday, partly due to strong global demand for its products. The beverage company raised its full-year guidance as a result.
Coca-Cola’s CEO, James Quincey, expressed optimism about the quarter’s results, noting solid growth in revenue and operating income amid a changing market landscape.
However, the North American market has seen a 1% decline in volume sales during the quarter. Quincey attributed this downturn in the U.S. division to decreased sales in “away-from-home channels,” which include water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the company’s Fairlife milk product and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter.
To counteract the volume decrease, Coca-Cola is partnering with food chains to incorporate its sodas into combo meals. Notably, discussions are ongoing with McDonald’s to enhance the fast food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share, while analysts had anticipated revenues of $11.76 billion, or approximately $0.81 per share.
The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi has been facing challenges in attracting U.S. consumers, who are increasingly favoring products that focus on weight loss and healthier options. A Gallup poll highlights that young adults in the U.S. are consuming significantly less alcohol than before. Earlier in July, Pepsi attributed its lackluster second quarter to a series of product recalls.