Consumers in the U.S. are increasingly delaying soda purchases due to the popularity of weight loss medications and non-alcoholic beverages. Nevertheless, Coca-Cola reported substantial earnings for the second quarter, citing strong global demand which led to an increase in its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting positive growth in topline revenue and operating income despite ongoing market changes.
In North America, however, volume sales decreased by 1% during the quarter. Quincey indicated that the decline in the U.S. was influenced by reduced sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas.
The volume decrease was somewhat mitigated by the success of its Fairlife milk brand and Coca-Cola, which ranked first and second in retail sales growth during the quarter.
To address the sales dip, Quincey mentioned ongoing collaborations with food chains to incorporate Coca-Cola beverages into combo meal deals, with specific efforts to enhance McDonald’s $5 meal deal that includes a soft drink.
Despite the challenges, Coca-Cola exceeded Wall Street’s revenue predictions, reporting $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, or roughly $0.81 per share.
The company also raised its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are shifting towards weight loss-focused and healthier products. The company recently attributed a lackluster second quarter to several product recalls.