Consumers in the U.S. are reducing their soda purchases, influenced by the popularity of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by robust global demand for its beverages, leading the company to increase its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed encouragement over the company’s second-quarter performance, highlighting solid revenue and operating income growth amid a changing market landscape. However, in North America, the company’s volume sales fell by 1% during the quarter due to declines in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The decrease in sales was somewhat mitigated by growth in Coca-Cola’s Fairlife milk line and solid performance from its flagship soda, which ranked first and second in retail sales growth during the quarter. To combat the decline, Quincey mentioned that Coca-Cola is collaborating with restaurant chains to incorporate its beverages into combo meal deals, including efforts with McDonald’s to enhance its $5 meal offering.
Overall, Coca-Cola outperformed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion, or about $0.81 per share. The company also adjusted its forecast for organic revenue growth to between 9% and 10%, up from an earlier estimate of 8% to 9%.
Similarly, Pepsi has been facing challenges in attracting U.S. consumers, who are increasingly drawn to healthier products focused on weight loss. Earlier in July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.