In the U.S., consumer preferences are shifting as weight loss drugs and non-alcoholic beverages lead many to reduce soda purchases. Despite this trend, Coca-Cola revealed strong earnings for the second quarter, benefiting from global demand for its beverages, which prompted the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second quarter, which showed solid growth in revenue and operating income amid changing market conditions. However, the company’s North American volume sales dipped by 1%, a decline attributed to softness in away-from-home channels, encompassing water, sports drinks, coffee, tea, and soda products.
The impact was somewhat mitigated by Coca-Cola’s Fairlife milk and the strong performance of Coke, which ranked first and second in retail sales growth for the quarter. To combat the sales decline, Coca-Cola is collaborating with food chains to include its beverages in combo meals, including efforts with McDonald’s to enhance the fast-food chain’s $5 meal deal.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, corresponding to about $0.84 per share, surpassing estimates of $11.76 billion. The company has updated its organic revenue growth forecast to between 9% and 10%, up from the prior prediction of 8% to 9%.
Pepsi, on the other hand, has faced challenges in capturing the attention of U.S. consumers, who increasingly favor products that promote weight loss and healthier living. 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 lackluster second quarter to a series of product recalls.