Consumer preferences for weight loss medications and non-alcoholic alternatives are leading to a decline in soda purchases in the U.S. However, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand, which has allowed the company to raise its full-year outlook.
James Quincey, CEO of Coca-Cola, noted the company’s positive results, stating that they achieved solid growth in both revenue and operating income amid a changing market environment.
In North America, Coca-Cola did experience a 1% decrease in volume sales during the quarter. Quincey attributed this decline to lower sales in away-from-home channels, which include water, sports drinks, coffee, tea, and soda. However, this drop was offset in part by increased sales of Fairlife milk and their flagship soda, Coke, which ranked at the top for retail sales growth.
To counterbalance the decline, Coca-Cola is collaborating with fast-food chains to include its sodas in combo meal offers. The company is reportedly partnering with McDonald’s to enhance their $5 meal deal that features a soft drink.
Overall, Coca-Cola surpassed Wall Street’s forecasts, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had predicted revenue of around $11.76 billion, or about $0.81 per share, according to FactSet.
The company has now raised its forecast for organic revenue growth to range between 9% and 10%, up from the previous estimate of 8% to 9%.
PepsiCo is similarly facing challenges in attracting U.S. customers who are increasingly opting for healthier beverages and weight-conscious choices. Recent statistics show a decline in alcohol consumption among young adults in the U.S. In early July, Pepsi attributed its lackluster second-quarter performance to a number of product recalls.