Consumers in the U.S. are holding back on soda purchases, influenced by the rise of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, boosting its full-year guidance due to robust global demand.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, which showcased solid growth in revenue and operating income amid changing market conditions. However, the company noted a 1% decline in volume sales in North America, attributed to decreased consumption in away-from-home channels, such as water, sports drinks, coffee, tea, and sodas.
This decline was partially mitigated by the success of Coca-Cola’s Fairlife milk and its flagship soda, both of which ranked highly in retail sales growth during the quarter. To counteract the volume drop, Coca-Cola is collaborating with fast food chains like McDonald’s to incorporate its sodas into meal deals.
Coca-Cola’s second-quarter revenue reached $12.4 billion, surpassing Wall Street expectations, which predicted revenues of $11.76 billion. The company now anticipates organic revenue growth of 9% to 10%, revising its earlier forecast of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly focused on healthier options and weight loss. In early July, Pepsi cited a series of product recalls as a factor contributing to its lackluster performance in the second quarter.