Consumers in the U.S. are increasingly holding off on soda purchases, influenced by the rise of weight loss drugs and non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong second-quarter earnings, citing robust global demand for its products, prompting the company to increase its full-year earnings forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about their quarterly results, noting significant growth in revenue and operating income despite a challenging market. However, the company did experience a 1% decline in volume sales in North America, attributed to weaker performance in away-from-home channels, such as water, sports drinks, coffee and tea, as well as soda.
Quincey indicated that the volume decline was partially mitigated by strong sales of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth for the quarter. To counter the downturn, Coca-Cola is collaborating with fast-food chains to integrate its beverages into combo meals, including efforts with McDonald’s to enhance the $5 meal deal that features a soft drink.
Despite the volume drop, Coca-Cola exceeded Wall Street’s expectations, reporting revenue of $12.4 billion for the second quarter, or about $0.84 per share, surpassing forecasts of $11.76 billion and roughly $0.81 per share. The company has now revised its forecast for organic revenue growth to a range of 9% to 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging U.S. consumers, who are shifting their preferences toward products that support weight loss and healthy living. The company recently attributed its lackluster second quarter to a series of product recalls.