In the United States, the rise of weight loss medications and non-alcoholic options has led consumers to hesitate in purchasing sugary sodas. Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely due to robust global demand for its beverages, prompting the company to raise its annual revenue forecasts.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in both revenue and operating income amidst a shifting market landscape. However, in North America, the company saw a 1% decline in volume sales, attributed to a decline in off-premise consumption, which includes products like water, sports drinks, coffee, tea, and sodas.
Interestingly, Coca-Cola’s Fairlife milk and its flagship soda, Coke, managed to offset some of the volume decline, ranking first and second in retail sales growth, respectively. To combat the sales drop, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meal deals, notably partnering with McDonald’s to enhance the fast-food chain’s $5 meal offering.
Overall, Coca-Cola surpassed Wall Street’s expectations, generating $12.4 billion in revenue for the quarter, translating to earnings of approximately $0.84 per share, while analysts had predicted revenue of $11.76 billion, or around $0.81 per share.
Looking ahead, Coca-Cola has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing its own challenges in attracting U.S. consumers who are increasingly gravitating toward health-focused products. In early July, Pepsi attributed its disappointing second-quarter results to a series of product recalls.