In the United States, consumers are delaying soda purchases due to the rising popularity of weight loss medications and non-alcoholic alternatives. Despite these challenges, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand, which led the company to revise its full-year sales expectations upwards.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating that they achieved solid growth in revenue and operating income in a dynamic market. However, he noted a 1% decline in volume sales in North America during the quarter, attributed to decreased sales in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
The company highlighted that this decline was partially mitigated by the success of its Fairlife milk and Coca-Cola products, which ranked first and second in retail sales growth during the quarter. To combat the sales dip, Quincey mentioned that Coca-Cola is collaborating with fast food chains to integrate its sodas into combo meals, specifically working with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Coca-Cola exceeded Wall Street projections with second-quarter revenues of $12.4 billion, translating to earnings of approximately $0.84 per share, surpassing the anticipated revenue of $11.76 billion and earnings of $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier prediction of 8% to 9%.
Similarly, PepsiCo is facing difficulties in capturing the interest of U.S. consumers who are increasingly favoring healthier lifestyle choices and weight management products. In July, Pepsi attributed its weaker second-quarter results to a series of product recalls.