In the U.S., the increasing popularity of weight loss medications and non-alcoholic beverages is impacting soda sales. Despite this trend, Coca-Cola reported impressive earnings for the second quarter, attributed to strong global demand for its products, leading the company to raise its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter results, which showcased significant growth in both revenue and operating income amidst a shifting market landscape.
However, the company experienced a 1% decline in volume sales in North America during this period. Quincey noted that the decrease in the U.S. division was influenced by a drop in sales across “away-from-home channels,” which encompass products like water, sports drinks, coffee, tea, and soda.
The decline was somewhat balanced by the performance of its Fairlife milk brand and its flagship soda, Coca-Cola, ranking first and second in retail sales growth for the quarter. To address the sales drop, Coca-Cola is collaborating with food chains, such as McDonald’s, to integrate its soda into value meal deals.
Overall, Coca-Cola surpassed Wall Street’s expectations. The company reported $12.4 billion in revenue for the second quarter, or approximately $0.84 per share, exceeding forecasts of $11.76 billion and $0.81 per share as estimated by FactSet.
Looking ahead, Coca-Cola has increased its forecast for organic revenue growth to between 9% and 10%, revising its earlier estimate of 8% to 9%.
Likewise, Pepsi is facing challenges in engaging U.S. consumers who are leaning towards healthier options and weight loss products. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.