In the United States, the rise of weight loss medications and non-alcoholic alternatives has caused many consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from a solid global demand for its beverages and subsequently raised its full-year projections.
James Quincey, the CEO of Coca-Cola, expressed optimism about the company’s results, highlighting solid revenue and operating income growth amidst a fluctuating market. However, the company saw a 1% decline in volume sales in North America during the quarter. Quincey noted this decrease was primarily due to weaker performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
To counteract this downturn, Coca-Cola’s offerings, such as Fairlife milk and its soda products including Coke, performed well, ranking highly in retail sales growth during the quarter. Quincey mentioned that the company is collaborating with food chains to integrate soda into combo meals, with efforts aligned with McDonald’s to enhance its $5 meal deal featuring a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting revenue of $12.4 billion for the second quarter, amounting to about $0.84 per share. Analysts had predicted revenue of $11.76 billion, or about $0.81 per share, according to FactSet.
The company also updated its forecast for organic revenue growth, now estimating an increase of between 9% and 10%, up from an earlier prediction of 8% to 9%.
Similarly, Pepsi has faced challenges reaching U.S. consumers, who are increasingly leaning towards weight loss focused and healthier options. A Gallup poll indicated that younger adults in the U.S. are consuming significantly less alcohol than in previous years. Earlier in July, Pepsi attributed its underwhelming second quarter to a series of product recalls.