Consumers in the U.S. are increasingly turning to weight loss drugs and non-alcoholic options, leading to a slowdown in soda purchases. Despite these challenges, Coca-Cola reported strong second-quarter earnings, which exceeded expectations and prompted the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting solid sales and operating income growth amid changing market conditions. However, the company experienced a 1% decline in volume sales in North America, attributed to reduced demand in out-of-home channels, including water, sports drinks, coffee, tea, and soda.
While volume sales dipped, Coca-Cola’s Fairlife milk and its flagship soda, Coke, helped mitigate losses, as these products ranked first and second in retail sales growth for the quarter. To counteract the decline in soda sales, Coca-Cola is collaborating with food chains, such as McDonald’s, to incorporate its beverages into combo meals.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, translating to earnings of about $0.84 per share, surpassing Wall Street predictions of $11.76 billion and $0.81 per share. The company has now revised its forecast for organic revenue growth to a range of 9% to 10%, an increase from its prior estimate of 8% to 9%.
Similarly, Pepsi is facing difficulties in attracting U.S. consumers who are focusing more on health and weight management. In July, Pepsi cited several product recalls as a factor contributing to its underwhelming second-quarter results.