Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic drinks, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, primarily driven by robust global demand for its beverages, prompting the company to raise its annual outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting significant growth in revenue and operating income amid a shifting market. However, the company’s North American volume sales fell by 1% in the same quarter. Quincey attributed this decline to weaker demand in away-from-home settings, impacting sales of water, sports drinks, coffee, tea, and soda.
To counteract the sales dip, Coca-Cola’s Fairlife milk and its classic Coke brand contributed positively, ranking high in retail sales growth. Quincey revealed that Coca-Cola is collaborating with fast-food chains to integrate soda into meal deals, specifically working with McDonald’s to enhance its $5 meal deal offering.
Overall, Coca-Cola exceeded analysts’ predictions with second-quarter revenues of $12.4 billion, translating to about $0.84 per share, compared to Wall Street’s forecast of $11.76 billion and roughly $0.81 per share.
The company has also revised its organic revenue growth projections, now anticipating an increase of 9% to 10%, adjusting upward from its earlier estimate of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are leaning toward healthier lifestyle choices, including weight loss products. Recently, Pepsi linked its subdued second-quarter performance to a series of product recalls.