In the U.S., consumers are increasingly opting for weight loss drugs and non-alcoholic beverages, resulting in a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely driven by robust global demand for its products, prompting the company to increase its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second-quarter results, highlighting solid growth in revenue and operating income amid a challenging market environment. However, the company experienced a 1% decline in volume sales in North America during the same period. Quincey attributed this drop to a decrease in sales across away-from-home channels, which encompasses various products including water, sports drinks, coffee, tea, and sodas.
To mitigate the decline, Coca-Cola cited its Fairlife milk line and its signature Coke brand, both of which led retail sales growth during the quarter. Quincey mentioned that the company is collaborating with fast-food chains to integrate its soda offerings into combo meals. Specifically, Coca-Cola is working with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, exceeding Wall Street’s expectations. Analysts had predicted revenue of $11.76 billion. The company updated its forecast for organic revenue growth to range between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in capturing the attention of U.S. consumers, who are leaning more towards products that emphasize health and weight loss. A recent Gallup poll indicated that young adults in the U.S. are consuming significantly less alcohol than in the past. In early July, Pepsi cited a series of recalls as a factor contributing to its lackluster performance in the second quarter.