Consumers in the U.S. are increasingly turning away from sodas, influenced by weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, attributed in part to global demand for its beverage offerings, leading the company to raise its full-year outlook.
“Our second-quarter results reflect solid growth in revenue and operating income amid a changing market,” stated James Quincey, CEO of Coca-Cola.
In North America, however, the company experienced a 1% decline in volume sales for the quarter. Quincey noted that this downturn was mainly due to “softness in away-from-home channels,” which includes categories like water, sports drinks, coffee, tea, and sodas.
Coca-Cola mentioned that the decline was somewhat mitigated by its Fairlife milk products and Coca-Cola soda, which achieved high retail sales growth during the quarter. To combat the sales drop, the company is collaborating with food chains to incorporate its soda into combo meals. Reports indicate that Coca-Cola is working with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations with a reported revenue of $12.4 billion for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or roughly $0.81 per share, according to FactSet.
The company has now revised its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi is also facing challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier lifestyles. A recent Gallup poll highlights that young adults are consuming significantly less alcohol than in the past. Pepsi recently attributed its lackluster second quarter performance to a number of recalls.