Rising interest in weight loss medications and non-alcoholic beverages has led American consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, driven by robust global demand for its beverages which prompted the company to raise its full-year revenue forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting “solid topline and operating income growth in an ever-changing landscape.” However, in North America, the company reported a 1% decline in volume sales during the quarter. Quincey attributed this decrease to “softness in away-from-home channels,” which encompasses sales of water, sports drinks, coffee, tea, and soda.
To counteract this decline, Coca-Cola highlighted the success of its Fairlife milk products and traditional Coke, which ranked high in retail sales growth during the period. In efforts to boost sales, the company is collaborating with food chains like McDonald’s to integrate its drinks into combo meal deals.
Despite the volume decline, Coca-Cola surpassed Wall Street’s expectations, achieving $12.4 billion in revenue, or $0.84 per share, exceeding forecasts of $11.76 billion and $0.81 per share. The company now anticipates organic revenue growth of 9% to 10%, an increase from its previous forecast of 8% to 9%.
Similarly, Pepsi is facing challenges as U.S. consumers increasingly seek healthier options and weight-loss-oriented products. A recent Gallup poll indicates that younger adults are consuming less alcohol. In July, Pepsi attributed its lackluster performance in the second quarter to a series of product recalls.