Recent trends in weight loss medications and non-alcoholic beverage alternatives have led to a decline in soda purchases among consumers in the United States.
Despite these challenges, Coca-Cola reported strong earnings for the second quarter, powered by global demand for its beverages, and increased its full-year projections. CEO James Quincey expressed optimism about the quarter’s results, highlighting solid growth in revenue and operating income amidst a shifting market landscape.
However, the company did see a 1% drop in volume sales in North America during the quarter. Quincey mentioned that this decline was mainly due to weaker performance in “away-from-home” channels, which include water, sports drinks, coffee, tea, and sodas. The decrease was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second respectively in retail sales growth.
To counteract the downturn, Coca-Cola is collaborating with food chains to incorporate its soda into combination meals, particularly working with McDonald’s to enhance its $5 meal deal that comes with a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations with second-quarter revenues of $12.4 billion, translating to approximately $0.84 per share. Analysts had predicted revenues of about $11.76 billion, or roughly $0.81 per share.
The company has revised its growth forecast, now anticipating an organic revenue increase of 9% to 10%, up from a previous estimate of 8% to 9%.
In a similar vein, Pepsi has faced difficulties in engaging U.S. consumers as they shift towards products that emphasize weight loss and healthy lifestyles. A Gallup poll suggests that young adults in the U.S. are consuming significantly less alcohol than before. Pepsi attributed its lackluster second quarter performance to a series of product recalls earlier this summer.