In the United States, the emergence of weight loss medications and non-alcoholic alternatives has led to a decline in soda purchases among consumers.
Despite this trend, Coca-Cola reported strong second-quarter earnings, attributed to solid global demand for its beverage offerings. The company has raised its full-year revenue guidance as a result.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting significant growth in both revenue and operating income. However, North American volume sales saw a slight decline of 1% during the quarter. Quincey explained that this drop was mainly due to decreased sales in away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soda products.
The decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked as the top two products in retail sales growth for the quarter. To counteract the volume loss, Coca-Cola is collaborating with food chains to incorporate its beverages into combo meals, notably partnering with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s forecasts, reporting $12.4 billion in revenue for the second quarter, which translates to approximately $0.84 per share. Analysts had predicted revenue of around $11.76 billion, or about $0.81 per share.
Looking ahead, Coca-Cola has updated its organic revenue growth forecast to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Pepsi, similarly to Coca-Cola, is facing challenges in attracting U.S. consumers who are increasingly focused on weight loss products and healthier lifestyles. A recent Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its weaker second-quarter performance to a series of product recalls.