Weight loss medications and healthier beverage options are causing consumers in the U.S. to reduce their soda purchases.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, with global demand for its beverages propelling the company to raise its full-year forecasts. CEO James Quincey expressed optimism about the results, noting significant growth in both revenue and operating income amid changing market conditions.
However, the company faced a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to weaker performance in away-from-home sales channels, encompassing water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by successful sales of Fairlife milk and Coca-Cola products, which ranked first and second in retail sales growth. To counteract the overall sales dip, Quincey mentioned that Coca-Cola is partnering with fast-food chains like McDonald’s to include its sodas in meal combination offers.
Coca-Cola’s performance exceeded analysts’ expectations, generating $12.4 billion in revenue, or about $0.84 per share, compared to anticipations of $11.76 billion and $0.81 per share. The company also revised its anticipated organic revenue growth upward to between 9% and 10%, from its earlier forecast of 8% to 9%.
Pepsi is also facing challenges in the U.S. market, as consumers increasingly gravitate towards weight-loss oriented and healthier options. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.