Weight loss medications and increased availability of non-alcoholic beverages are causing U.S. consumers to reduce their soda purchases. Nevertheless, Coca-Cola reported strong second-quarter earnings, bolstered by global demand for its beverages. This positive performance has led the company to raise its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s results, highlighting significant growth in revenue and operating income amidst market changes. However, the North American market saw a 1% decline in volume sales during the quarter due to decreased purchases in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda brands.
The decline in volume was partially mitigated by strong sales of Fairlife milk and Coca-Cola soda, both of which ranked highly in retail growth for the quarter. To counteract the downward trend, Quincey mentioned that Coca-Cola is collaborating with fast-food chains to include its beverages in meal combos, specifically through a partnership with McDonald’s to enhance their $5 meal deal, which comes with a soft drink.
Coca-Cola’s second quarter results surpassed Wall Street projections, with revenues reaching $12.4 billion, translating to approximately $0.84 per share. Analysts had anticipated revenues of around $11.76 billion, approximately $0.81 per share. The company now expects organic revenue growth of 9% to 10%, increasing its earlier guidance of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are leaning more toward health-conscious options and weight-loss products. The trend of young Americans consuming less alcohol, as indicated by a Gallup poll, further complicates the situation. In early July, Pepsi attributed its lackluster second-quarter results to a series of product recalls.