In a reflection of changing consumer habits in the U.S., weight loss medications and non-alcoholic beverages are causing a dip in soda sales. Despite this trend, Coca-Cola reported strong earnings in the second quarter, supported by robust global demand for its products, prompting the company to revise its full-year guidance upward.
CEO James Quincey expressed optimism about the company’s performance, highlighting significant growth in both revenue and operating income amid a shifting market landscape. However, Coca-Cola experienced a 1% decline in volume sales in North America during this period. Quincey attributed this downturn to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
This sales dip was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its flagship soda, Coke, which achieved notable retail sales growth. To counterbalance the overall decline, the company is collaborating with food chains, notably McDonald’s, to include its sodas in combo meal offerings, aiming to enhance the appeal of fast food meal deals.
Coca-Cola surpassed Wall Street’s predictions with second-quarter revenue reaching $12.4 billion, translating to approximately $0.84 per share, well above the expected $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%.
Similarly, Pepsi has been facing challenges in grabbing the attention of health-conscious U.S. consumers, who are increasingly focusing on weight loss and healthier lifestyle choices. The beverage giant recently indicated that a series of product recalls had impacted its sales during the second quarter.