Consumers in the U.S. are increasingly shying away from sodas due to the rise in weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola announced strong second-quarter earnings, bolstered by significant global demand for its beverages, leading the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s results, highlighting solid growth in revenue and operating income amidst changing market conditions. However, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey noted that this decline was primarily due to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
The decrease in soda sales was somewhat mitigated by the performance of Fairlife milk and Coca-Cola’s flagship product, which achieved top positions in retail sales growth during the quarter. To combat the decline, Coca-Cola is collaborating with food chains to integrate its sodas into combo meal offerings, including working with McDonald’s to enhance its meal deal that features a soft drink.
Overall, Coca-Cola exceeded market expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or around $0.81 per share. The company has now increased its forecast for organic revenue growth to between 9% and 10%, up from the previous prediction of 8% to 9%.
Pepsi is also facing challenges in capturing consumer interest as more people opt for products that align with weight loss and healthier lifestyle choices. The company pointed to a series of product recalls as a contributing factor to its lackluster second-quarter performance.