In the United States, the growing popularity of weight loss medications and non-alcoholic beverages is leading consumers to reconsider their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by robust global demand for its beverage selections, prompting the company to enhance its full-year outlook.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance in the second quarter, highlighting solid growth in revenue and operating income amidst a dynamic market environment.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the same quarter. Quincey attributed the downturn in the U.S. segment to weaker performance in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda.
The company noted that this decline was somewhat mitigated by its Fairlife milk line and the popularity of Coke itself, which ranked first and second in retail sales growth within the quarter.
To counteract the sales decline, Coca-Cola is collaborating with food chains to include its soft drinks in combo meal offerings. Reports suggest that the beverage giant is working with McDonald’s to enhance the fast-food chain’s $5 meal deal that features a soft drink.
Coca-Cola’s performance surpassed Wall Street’s expectations, posting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated a revenue of $11.76 billion, or about $0.81 per share.
The company has now revised its forecast for organic revenue growth to between 9% and 10%, up from the earlier estimate of 8% to 9%.
Similar to Coca-Cola, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly opting for products focused on health and weight management. According to a recent Gallup poll, young Americans are consuming significantly less alcohol than in the past. In early July, Pepsi cited a series of recalls as a contributing factor to its lackluster second-quarter results.