Consumers in the U.S. are increasingly delaying soda purchases due to the rise of weight loss medications and non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong earnings for the second quarter on Tuesday, supported by robust global demand for its products. This success has led the company to raise its full-year revenue projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid growth in revenue and operating income amid changing market conditions. However, North America witnessed a 1% decline in volume sales during the quarter. Quincey attributed this to a decrease in sales from away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soft drinks.
The sales dip was partially balanced by gains in sales from Fairlife milk and Coca-Cola’s namesake soda, which performed well in retail growth. To counteract the volume drop, Coca-Cola is partnering with fast-food restaurants to include its beverages in meal deals. The company is reportedly working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola’s overall revenue for the second quarter reached $12.4 billion, exceeding Wall Street expectations. Analysts had anticipated revenue of $11.76 billion. The company has now revised its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similar to Coca-Cola, Pepsi has faced challenges in attracting U.S. consumers who are more focused on weight management and healthier lifestyle choices. Recent data from a Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In July, Pepsi attributed its lackluster second quarter to multiple product recalls.