In the United States, the rise of weight loss medications and non-alcoholic alternatives is causing consumers to delay soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its beverages. As a result, the company has raised its projections for the year.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting significant growth in both revenue and operating income amid a changing market environment.
However, the North American division saw a 1% decline in volume sales during the quarter. Quincey noted that this decrease was largely due to weaker performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
To mitigate this downturn, Coca-Cola cited its successful Fairlife milk venture and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter. Quincey indicated that the company is collaborating with fast-food chains to integrate its sodas into combo meals, mentioning efforts with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Coca-Cola’s quarterly results exceeded market expectations, yielding $12.4 billion in revenue, or about $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or approximately $0.81 per share.
The company has now adjusted its outlook for organic revenue growth to a range of 9% to 10%, an upgrade from its previous forecast of 8% to 9%.
Similarly, Pepsi is facing challenges in appealing to U.S. consumers, who are increasingly favoring healthier options and weight-loss-focused products. Recent reports indicate that young adults in the U.S. are consuming significantly less alcohol, according to a Gallup poll. In early July, Pepsi attributed its lackluster second-quarter results to a series of product recalls.