Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic beverages, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by high global demand for its beverages, which prompted the company to raise its full-year expectations.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that their second-quarter results showcased significant growth in both revenue and operating income amidst a shifting market landscape.
However, the company did experience a 1% decline in volume sales in North America. Quincey explained during a recent earnings call that this decline was influenced by reduced sales in “away-from-home channels” like water, sports drinks, coffee, tea, and sodas.
Despite this drop, sales were partially bolstered by Fairlife milk and Coca-Cola soda itself, which ranked first and second in retail sales growth, respectively. To combat the decline in sales, Coca-Cola is collaborating with food chains to integrate its soda into combo meals, specifically working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
For the second quarter, Coca-Cola reported revenues of $12.4 billion, translating to approximately $0.84 per share, surpassing Wall Street expectations, which had predicted $11.76 billion in revenue and roughly $0.81 per share.
The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from the previously anticipated 8% to 9%.
Pepsi, facing similar challenges, has also struggled to engage U.S. consumers, who increasingly prefer products focused on weight loss and healthier choices. In early July, Pepsi attributed its lackluster second-quarter results to a series of recalls.