Consumers in the U.S. are increasingly holding off on purchasing sodas due to the rising popularity of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, largely fueled by robust global demand that has led the company to increase its full-year revenue projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, citing solid growth in both top-line and operating income amidst a shifting market landscape. However, the company did experience a 1% decline in volume sales within North America during the same period. Quincey pointed out that this dip was due to reduced sales in “away-from-home channels,” which encompass a variety of products, including soda, sports drinks, and coffee.
To mitigate the volume decline, Coca-Cola’s Fairlife milk line and its flagship beverage, Coke, performed well, ranking first and second in retail sales growth this quarter. Quincey mentioned that the company is collaborating with food chains, such as McDonald’s, to incorporate its sodas into combo meal offerings aimed at driving sales.
Coca-Cola’s second-quarter results exceeded Wall Street’s expectations, with reported revenue of $12.4 billion and earnings of approximately $0.84 per share. Analysts had projected lower figures, anticipating revenue of around $11.76 billion and earnings of roughly $0.81 per share. The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are now more focused on weight loss and healthier lifestyles. The beverage giant attributed its lackluster second quarter to several product recalls earlier in July.