Weight loss medications and non-alcoholic alternatives have led to a decline in soda purchases among consumers in the U.S.
Despite this trend, Coca-Cola announced impressive earnings for the second quarter. The company attributed its success to strong global demand for its products, prompting an increase in its full-year revenue forecasts. CEO James Quincey expressed optimism about the company’s performance, noting solid growth in both revenue and operating income amid evolving market conditions.
However, Coca-Cola experienced a 1% drop in volume sales in North America during the same period. Quincey indicated that this decline was influenced by reduced consumption in channels away from home, which encompasses products like water, sports drinks, coffee, tea, and soda. The decline was somewhat counterbalanced by successes in its Fairlife milk brand and its flagship soda, Coca-Cola, which achieved significant retail sales growth.
To address the sales dip, the company is collaborating with food chains to include its soda in combo meals. Notably, Coca-Cola is working with McDonald’s to enhance the fast food chain’s $5 meal deal, which features a soft drink.
Ultimately, Coca-Cola outperformed Wall Street expectations with second quarter revenue hitting $12.4 billion, translating to earnings of approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion and earnings of about $0.81 per share.
The company has revised its outlook for organic revenue growth to between 9% and 10%, raising its earlier estimate of 8% to 9%.
Like Coca-Cola, Pepsi is facing challenges in attracting U.S. consumers, who are leaning more towards weight loss and healthier lifestyle products. In early July, Pepsi attributed its lackluster second quarter performance to a series of product recalls.