In the United States, the growing popularity of weight loss medications and non-alcoholic alternatives has led consumers to hesitate in purchasing sodas.
Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by significant global demand for its beverage selections. The company also raised its full-year outlook in response to these results.
Coca-Cola CEO James Quincey expressed optimism regarding the second-quarter performance, noting “solid topline and operating income growth in an ever-changing landscape.”
However, the company experienced a slight decline in volume sales in North America, down 1% for the quarter. Quincey attributed this decrease to reduced activity in away-from-home channels, including water, sports drinks, coffee, tea, and sodas.
The decline in volume was somewhat balanced by the success of Fairlife milk and Coca-Cola’s flagship soda, which were leaders in retail sales growth during this period.
To counter the volume drop, Quincey mentioned that Coca-Cola is collaborating with food chains to integrate its sodas into combo meal deals. For instance, the beverage company is reportedly working with McDonald’s to enhance the fast food giant’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola surpassed market expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or around $0.81 per share.
Furthermore, Coca-Cola has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
In a similar vein, Pepsi is facing challenges in engaging U.S. consumers, who are increasingly drawn to products that emphasize weight management and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in previous years. In early July, Pepsi attributed its weaker second-quarter results to a series of product recalls.