In the United States, consumer preferences are shifting towards weight loss drugs and non-alcoholic beverages, causing a slowdown in soda purchases. Nevertheless, Coca-Cola reported strong second-quarter earnings, fueled by heightened global demand for its products, leading the company to increase its full-year outlook.
James Quincey, CEO of Coca-Cola, expressed optimism about the company’s performance in a statement, highlighting solid growth in revenue and operating income despite a challenging market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed the drop to reduced sales in “away-from-home channels,” which encompass its water, sports drinks, coffee, tea, and soda products.
The decline in sales was partially mitigated by the success of Fairlife milk and the company’s flagship soda, Coke, which ranked first and second in retail sales growth for the quarter. To address the downturn, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals. Reports indicate that the company is partnering with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Despite the challenges, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had estimated revenues of $11.76 billion, or around $0.81 per share.
Looking ahead, Coca-Cola raised its forecast for organic revenue growth to between 9% and 10%, revising previous projections of 8% to 9%.
Similarly, Pepsi is facing difficulties in engaging U.S. consumers, who are gravitating towards products that emphasize weight loss and healthier lifestyles. Young adults in the U.S. are drinking less alcohol than before, according to a Gallup poll. Earlier in July, Pepsi cited a series of product recalls as a factor for its lackluster second-quarter results.