Recent trends in weight loss medications and the demand for non-alcoholic beverages have led to a decline in soda consumption among U.S. consumers. Despite this shift, Coca-Cola reported impressive earnings for the second quarter, benefiting from strong global demand for its products, which prompted the company to raise its full-year forecasts.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating that they achieved solid growth in topline sales and operating income amid a challenging market environment.
However, North America saw a 1% drop in volume sales for the quarter. Quincey noted that the decrease was largely due to lower sales in “away-from-home channels,” encompassing water, sports drinks, coffee, tea, and sodas.
The decline was somewhat balanced by the success of Coca-Cola’s Fairlife milk and its flagship soda, Coke, both of which ranked high in retail sales growth during the quarter. To address the downward trend, Coca-Cola is collaborating with food chains to integrate its products into combo meals, including a partnership with McDonald’s to enhance its $5 meal deal that features a soft drink.
Overall, Coca-Cola exceeded Wall Street predictions, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share, while analysts had anticipated revenues of around $11.76 billion and earnings of roughly $0.81 per share.
The company now expects organic revenue growth of 9% to 10%, an increase from its earlier forecast of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly leaning towards weight loss products and healthier choices. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.