Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic beverages, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by global demand for its beverages, which prompted the company to raise its full-year forecast.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting significant growth in revenue and operating income amidst a changing market landscape. However, he acknowledged a 1% decline in volume sales in North America, attributing this decrease to reduced consumption in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
The decline in sales was somewhat offset by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth, respectively. Quincey highlighted ongoing efforts to partner with food chains to integrate soda into combo meals, with specific mentions of collaborations with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Coca-Cola’s reported revenue in the second quarter reached $12.4 billion, surpassing Wall Street expectations of $11.76 billion. This equates to earnings of approximately $0.84 per share compared to the anticipated $0.81.
The company now anticipates organic revenue growth between 9% and 10%, an increase from its earlier projection of 8% to 9%.
Pepsi is facing similar challenges in the U.S. market, as consumers lean towards products that support weight loss and healthier lifestyles. Recent trends indicate that young adults are also consuming less alcohol, impacting soda sales. In early July, Pepsi attributed its weaker second quarter to various product recalls.