Weight loss medications and a trend towards non-alcoholic beverages have led consumers in the U.S. to reduce their soda purchases. Despite this, Coca-Cola announced strong earnings for the second quarter, fueled by solid global demand for its beverage offerings, prompting the company to raise its full-year expectations.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting growth in revenue and operating income amid a fluctuating market. However, the company reported a 1% decline in volume sales in North America during the quarter. Quincey attributed this downturn to weaker sales in “away-from-home channels,” which encompass products like water, sports drinks, coffee, tea, and sodas.
This decline was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its flagship soda, Coca-Cola, which ranked highly in retail sales growth. To counter the decrease, Coca-Cola is collaborating with food chains to integrate its sodas into combo meal deals, particularly working with McDonald’s to enhance their $5 meal offer, which includes a soft drink.
Coca-Cola’s revenue for the quarter reached $12.4 billion, exceeding Wall Street’s expectations of $11.76 billion. The company reported earnings of approximately $0.84 per share, up from the anticipated $0.81. Furthermore, Coca-Cola has revised its forecast for organic revenue growth, now estimating an increase of 9% to 10%, an upgrade from its prior estimate of 8% to 9%.
Pepsi, similar to Coca-Cola, is facing challenges in engaging U.S. consumers, who are increasingly focused on health-conscious and weight-loss oriented products. Recent data from a Gallup poll indicates that young adults are significantly reducing their alcohol consumption. In early July, Pepsi cited a series of product recalls as a factor in its disappointing second quarter results.