Weight loss medications and non-alcoholic alternatives have led many Americans to delay purchasing sodas, particularly in the U.S. market.
Despite this trend, Coca-Cola reported impressive second-quarter earnings, attributing its success to strong global demand for its beverages, which led the company to adjust its full-year forecasts upward.
Coca-Cola CEO James Quincey expressed optimism about the results, highlighting solid growth in revenue and operating income amid a shifting market landscape.
In North America, however, volume sales experienced a 1% decline during the quarter, which Quincey identified as a result of weaker performance in away-from-home channels, encompassing water, sports drinks, coffee, tea, and soda products. This decline was partially countered by the success of Fairlife milk and Coca-Cola, which ranked first and second in retail sales growth during the same period.
To combat the sales slump, Coca-Cola is partnering with food chains to incorporate its sodas into combo meals, notably collaborating with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Coca-Cola’s performance exceeded Wall Street estimates, with reported revenue of $12.4 billion for the second quarter, which translates to approximately $0.84 per share, surpassing expectations of $11.76 billion in revenue and $0.81 per share.
The company has also raised its organic revenue growth outlook to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in appealing to U.S. consumers, who are increasingly favoring products that focus on weight loss and healthier lifestyle choices. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second quarter to a series of product recalls.