Weight loss medications and non-alcoholic beverage alternatives are causing consumers in the U.S. to hesitate when it comes to purchasing sodas. Despite this trend, Coca-Cola reported strong second-quarter earnings driven by significant global demand, which led the company to increase its full-year revenue forecasts.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the company’s performance, noting solid growth in both revenue and operating income amidst a changing market landscape. However, in North America, the company experienced a 1% decline in volume sales for the quarter. Quincey attributed this dip to decreased sales in away-from-home channels, which encompass beverages like water, sports drinks, coffee, tea, and sodas.
This decline was somewhat mitigated by gains from Fairlife milk and notable sales growth for Coke itself, which ranked first and second in retail beverage growth for the quarter. To address the reduction in sales, Coca-Cola is collaborating with food chains to include its sodas in combo meals. Reports suggest the company is working with McDonald’s to enhance the appeal of its $5 meal deal that features a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had projected revenue of $11.76 billion, or roughly $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, up from an earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in gaining traction with U.S. consumers who are increasingly prioritizing health-conscious choices over sugary drinks. In early July, Pepsi cited a series of product recalls as a contributing factor to its lower-than-expected performance in the second quarter.