In the United States, the popularity of weight loss medications and non-alcoholic alternatives has caused a decline in soda consumption. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand for its beverages, which led the company to raise its full-year guidance.
Coca-Cola CEO James Quincey expressed optimism about the company’s recent performance, highlighting solid growth in revenue and operating income amid changing market conditions. However, the company’s North American sales volume fell by 1% during the quarter. Quincey attributed the decline to weakened performance in “away-from-home channels,” which include its offerings in water, sports drinks, coffee, tea, and soda.
The revenue drop was somewhat balanced by the success of Fairlife milk and Coca-Cola, which showed strong retail sales growth in the quarter. To combat the decline, Quincey indicated that Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals, including a partnership with McDonald’s to enhance their $5 meal deal that features a soft drink.
Coca-Cola’s second-quarter revenue of $12.4 billion and earnings of approximately $0.84 per share surpassed Wall Street expectations, which had predicted revenues of $11.76 billion and earnings around $0.81 per share. The company has revised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers increasingly focused on weight loss and healthier lifestyles. A Gallup poll notes a significant reduction in alcohol consumption among young adults in the U.S. Earlier this month, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.