Weight loss drugs and non-alcoholic alternatives are causing U.S. consumers to reduce their soda purchases, but Coca-Cola has still managed to report strong second-quarter earnings. The beverage company announced that it is raising its full-year guidance due to robust global demand for its products.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating that the quarter showed solid growth despite a shifting market landscape. However, it was noted that volume sales in North America saw a slight decline of 1%, attributed to decreased sales in away-from-home channels, which affect soda, water, tea, and coffee sales.
This decrease was partially mitigated by growth in the company’s Fairlife milk brand and Coca-Cola, which led retail sales growth in its category. To address the decline in soda sales, Coca-Cola is collaborating with food chains to incorporate its beverages into combo meals, including a partnership with McDonald’s to enhance its $5 meal deal.
Despite the challenges, Coca-Cola surpassed Wall Street expectations, reporting revenues of $12.4 billion for the second quarter, equating to approximately $0.84 per share, while analysts had predicted revenue of $11.76 billion. The company has adjusted its forecast for organic revenue growth to a range of 9% to 10%, raising it from a previous estimate of 8% to 9%.
Similarly, Pepsi has been facing challenges in attracting U.S. consumers, who are gravitating toward products that focus on weight loss and healthier options. The company recently cited a series of product recalls as a factor in its lackluster second-quarter performance.