Health-conscious consumers and the rise of weight loss drugs, along with non-alcoholic beverages, are impacting soda purchases in the United States.
Despite these trends, Coca-Cola announced strong earnings for the second quarter, thanks to robust global demand for its beverage offerings, leading the company to increase its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid growth in revenue and operating income amid changing market conditions.
However, the company did experience a 1% decline in volume sales in North America during the last quarter. Quincey explained that this decrease in the U.S. was attributed to lower sales in “away-from-home” channels, which include water, sports drinks, coffee, tea, and sodas.
Coca-Cola noted that this decline was somewhat mitigated by strong sales of its Fairlife milk and Coke, which ranked first and second in retail sales growth this quarter. To boost sales further, the company is collaborating with food chains, including McDonald’s, to integrate its soda into combo meals.
Coca-Cola’s performance exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, or approximately $0.84 per share, surpassing forecasts of $11.76 billion or around $0.81 per share.
In light of its performance, Coca-Cola has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Pepsi, on the other hand, has faced challenges in engaging U.S. consumers who are increasingly focused on healthier choices, a trend reflected in a Gallup poll showing that young adults are consuming less alcohol. Earlier this month, Pepsi cited a series of product recalls as a significant factor in its disappointing second-quarter results.