In the United States, the rise of weight loss drugs and non-alcoholic beverages is leading consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by solid global demand for its beverages, which resulted in the company increasing its full-year guidance.
James Quincey, CEO of Coca-Cola, expressed optimism about the company’s second-quarter performance, which showcased significant topline and operating income growth despite a fluctuating market. However, in North America, volume sales dipped by 1% during the quarter. Quincey attributed this decrease to softer sales in away-from-home channels, encompassing water, sports drinks, coffee, tea, and soda products.
The company noted that the decline was partly balanced by its Fairlife milk brand and its flagship product, Coke, which experienced the highest and second-highest growth in retail sales respectively during the quarter. To mitigate the sales decline, Coca-Cola is collaborating with restaurant chains to incorporate its soda into combination meals. Reports indicate the company is partnering with McDonald’s to enhance a $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street’s expectations with second-quarter revenues reaching $12.4 billion, translating to $0.84 per share. Analysts had anticipated revenue of $11.76 billion or around $0.81 per share. Furthermore, Coca-Cola raised its forecast for organic revenue growth to a range between 9% and 10%, up from its previous estimate of 8% to 9%.
Similarly, Pepsi has faced difficulties in attracting U.S. consumers who are increasingly gravitating towards weight loss and healthier lifestyle products. A recent Gallup poll indicates a significant decline in alcohol consumption among young adults in the U.S. Earlier this month, Pepsi attributed its subdued second-quarter performance to a series of product recalls.