In the United States, consumers are delaying soda purchases due to the rise of weight loss medications and alternative non-alcoholic beverages. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand, leading the company to raise its annual expectations.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second-quarter results, highlighting solid growth in revenue and operating income amid changing market conditions. However, sales volumes in North America fell by 1% during the quarter. Quincey noted that this decline was primarily due to reduced sales in away-from-home venues, which encompass their water, sports drinks, coffee, tea, and soda products.
The dip in volume was somewhat balanced by growth in Fairlife milk products and its flagship soda, Coca-Cola, which ranked first and second, respectively, in retail sales growth for the period. To counter the downturn, Coca-Cola is collaborating with fast-food chains to include its sodas in meal combo deals, with reports indicating partnerships with McDonald’s to enhance their $5 meal offer that includes a soft drink.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, exceeding Wall Street projections of $11.76 billion. The earnings reflected about $0.84 per share, outperforming the anticipated $0.81 per share. Consequently, the company has revised its outlook for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging American consumers who are increasingly opting for health-conscious products and ways of living. Early July reports from Pepsi cited product recalls as a factor contributing to a lackluster performance in the second quarter.