Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to postpone soda purchases. Nonetheless, Coca-Cola reported strong second-quarter earnings, driven by high global demand for its beverages, resulting in an increased full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid revenue and operating income growth amid a shifting market. However, the company did see a 1% dip in volume sales in North America during this period. Quincey attributed this decline to “softness in away-from-home channels,” which encompasses water, sports drinks, coffee, tea, and soda products.
The decline in soda sales was somewhat balanced by the success of Fairlife milk and Coca-Cola’s flagship beverage, which ranked first and second in retail sales growth, respectively. To address the volume decrease, Coca-Cola is collaborating with restaurant chains to incorporate soda options into combo meals, specifically working with McDonald’s to enhance its $5 meal deal, including a soft drink.
Despite the overall volume drop, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share, surpassing the predicted $11.76 billion and $0.81 per share.
The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers, who are increasingly focusing on weight loss and healthier lifestyles. Recent reports indicate that young adults in the U.S. are significantly reducing their alcohol consumption. Pepsi cited a series of product recalls as a contributing factor to its weaker performance in the second quarter.