Recent trends in weight loss medications and non-alcoholic alternatives have led consumers in the U.S. to reduce their soda purchases. Despite this decline, Coca-Cola announced a strong performance in its second-quarter earnings, attributing much of its success to solid global demand for its beverages. As a result, the company has increased its full-year expectations.
Coca-Cola’s CEO, James Quincey, expressed optimism about the results, highlighting the company’s ability to generate significant topline and operating income growth amid a shifting market.
However, Coca-Cola did experience a 1% decrease in volume sales in North America during the quarter. Quincey noted that the decline in the U.S. division was largely due to “softness in away-from-home channels,” which encompass sales of water, sports drinks, coffee and tea, as well as soda.
The dip in volume was somewhat mitigated by the popularity of Coca-Cola’s Fairlife milk and its flagship soda, Coke, which ranked first and second in retail sales growth for the period.
To counteract the sales decline, the company is collaborating with fast food chains to include its soda in value meals. Reports suggest that Coca-Cola is working with McDonald’s to enhance its $5 meal deal, which comes with a soft drink.
Overall, Coca-Cola’s performance exceeded Wall Street’s predictions, reporting $12.4 billion in revenue—approximately $0.84 per share—while analysts had anticipated revenues of $11.76 billion, or around $0.81 per share.
The company has now revised its forecast for organic revenue growth to a range of 9% to 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in engaging U.S. consumers, who are shifting towards products that align with healthier lifestyles and weight loss goals. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.