Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic beverages, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its beverages, prompting the company to update its full-year forecasts.
“We are encouraged by our second-quarter results, which showed solid revenue and operating income growth in a rapidly changing market,” stated James Quincey, CEO of Coca-Cola.
However, Coca-Cola’s volume sales in North America dipped by 1% during the quarter. Quincey noted that this decline in the U.S. market was due to lower sales in “away-from-home channels,” such as water, sports drinks, coffee, tea, and soda.
The decline was somewhat mitigated by strong sales of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter.
To counter the volume drop, Quincey revealed that Coca-Cola is collaborating with food chains to include its sodas in combo meal offerings, specifically mentioning efforts with McDonald’s to enhance the fast-food chain’s $5 meal deal that comes with a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue during the second quarter, or about $0.84 per share. Analysts had anticipated revenues of $11.76 billion, translating to approximately $0.81 per share.
The company has raised its organic revenue growth forecast to between 9% and 10%, up from the previous projection of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are shifting their focus toward weight loss and healthier options. In early July, Pepsi indicated that a series of product recalls negatively impacted its second-quarter performance.