Weight loss drugs and non-alcoholic alternatives are leading consumers in the U.S. to curb their soda purchases.
Despite these trends, Coca-Cola reported strong second-quarter earnings, fueled by significant global demand for its beverages, which allowed the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter results, noting steady growth in both revenue and operating income in a changing market landscape.
However, in North America, volume sales experienced a 1% decline during the quarter. Quincey attributed this drop in the U.S. to softer sales in away-from-home channels such as water, sports drinks, coffee, tea, and sodas.
The company indicated that this decline was somewhat mitigated by the success of its Fairlife milk brand and Coca-Cola, which achieved first and second place in retail sales growth, respectively, during the quarter.
To combat the volume decrease, Quincey mentioned that Coca-Cola is collaborating with fast-food chains to integrate its products into combo meals. Reports suggest that Coca-Cola is working with McDonald’s to enhance the fast food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenue of about $11.76 billion or roughly $0.81 per share.
Furthermore, Coca-Cola updated its forecast for organic revenue growth to a range of 9% to 10%, an increase from its prior prediction of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.