In the United States, consumers are increasingly turning to weight loss medications and non-alcoholic alternatives, which is impacting soda sales. Despite these challenges, Coca-Cola reported strong second-quarter earnings, driven by solid global demand for its beverages, leading the company to raise its full-year guidance.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting strong topline and operating income growth in a changing market. However, the company did experience a 1% decline in volume sales in North America, which Quincey attributed to weaker performance in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
To mitigate the volume decline, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals. The company is specifically working with McDonald’s to enhance their $5 meal deal, which includes a soft drink.
Despite the sales dip in North America, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, or approximately $0.84 per share, surpassing forecasts of $11.76 billion and $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, is finding it difficult to engage U.S. consumers, who are increasingly opting for products that emphasize weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are drinking significantly less alcohol than before. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.