Consumer trends towards weight loss drugs and non-alcoholic beverages are impacting soda sales in the U.S., leading to a cautious approach to purchasing these products.
Despite these challenges, Coca-Cola reported strong second-quarter earnings, driven by robust global demand for its beverages. This performance led the company to raise its full-year sales forecasts. CEO James Quincey expressed optimism regarding the results, highlighting solid growth in both revenue and operating income amid changing market dynamics.
However, Coca-Cola experienced a slight volume decline of 1% in North America during the quarter. Quincey attributed this decrease to weaker sales in “away-from-home channels,” which encompasses soda, sports drinks, coffee, and tea. The decline was somewhat mitigated by strong sales of Fairlife milk and its flagship soda, Coca-Cola, which ranked high in retail sales growth.
To help counter the sales drop, Coca-Cola is collaborating with fast food chains, including McDonald’s, to integrate its sodas into combo meal offerings. Overall, the company exceeded Wall Street forecasts, reporting $12.4 billion in revenue, which translates to approximately $0.84 per share. Analysts had anticipated revenues of about $11.76 billion, or around $0.81 per share.
Coca-Cola also revised its organic revenue growth forecast upward, now predicting growth between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Pepsi, facing similar struggles with U.S. consumers shifting toward healthier options, reported a lackluster second quarter, impacted by several product recalls and a changing market focus.