In the United States, weight loss medications and non-alcoholic alternatives are leading consumers to postpone soda purchases. Despite this trend, Coca-Cola released strong second-quarter earnings, fueled by significant global demand for its beverages, prompting the company to raise its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the solid growth in both revenue and operating income during the quarter, despite the challenging marketplace.
However, in North America, Coca-Cola experienced a 1% drop in volume sales for the quarter. Quincey attributed this decrease to a decline in “away-from-home channels,” which encompass sales from water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the company’s Fairlife milk brand and its classic soda, Coke, which ranked first and second in retail sales growth during the same period.
To combat falling sales, Coca-Cola is collaborating with restaurant chains to integrate its beverages into combo meal offerings. The company is specifically working with McDonald’s to enhance the fast food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to about $0.84 per share, surpassing the predicted $11.76 billion and $0.81 per share, as projected by FactSet.
The company has updated its forecast for organic revenue growth, now expecting it to fall between 9% and 10%, a revision from the previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly favoring products that emphasize weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming much less alcohol than before. In early July, Pepsi cited a series of product recalls as a reason for its lackluster performance in the second quarter.