In the United States, the introduction of weight loss medications and growing preferences for non-alcoholic options are leading consumers to reduce their soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, fueled by robust global demand, prompting the company to increase its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that the strong topline and operating income growth were achieved even in a shifting market environment. However, the company did see a 1% decline in volume sales in North America, which Quincey attributed to decreased activity in away-from-home channels like restaurants and other food service outlets.
Coca-Cola noted that the drop in sales was partially mitigated by its Fairlife milk and Coke, which ranked first and second, respectively, in retail sales growth during the quarter. To counteract the volume decline, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals, with efforts underway to enhance McDonald’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share, while Wall Street had anticipated $11.76 billion in revenue. The company has revised its organic revenue growth forecast to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges as it seeks to engage U.S. consumers who are increasingly favoring healthier options. In early July, the company attributed its lackluster second quarter to a series of product recalls.