In the United States, the rise of weight loss drugs and non-alcoholic options is leading consumers to reconsider their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by global demand for its beverage offerings, and raised its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting significant growth in both revenue and operating income amidst changing market conditions. However, the company’s sales volume in North America dropped by 1% during the quarter. Quincey indicated that this decline was linked to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The drop in volume was somewhat mitigated by the strong performance of Fairlife milk and Coke, which ranked first and second in retail sales growth, respectively. To counteract the decline in soda sales, Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its beverages into combo meals, such as the fast food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had projected revenues of $11.76 billion, or roughly $0.81 per share. The company has now revised its forecast for organic revenue growth to between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Pepsi, on the other hand, is facing similar challenges in capturing consumer interest. The company has noted a shift in U.S. consumer behavior towards products that promote weight loss and healthier lifestyles. In early July, Pepsi attributed its disappointing second-quarter performance to a series of product recalls.