Weight loss medications and non-alcoholic alternatives are leading U.S. consumers to reduce soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by global demand for its beverages, prompting the company to increase its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid revenue and operating income growth amidst changing market conditions. However, the North American market saw a 1% decline in volume sales during the quarter due to reduced demand in various channels that include water, sports drinks, coffee, tea, and sodas.
The decline was somewhat mitigated by the success of Fairlife milk and the popularity of its flagship soda, Coca-Cola, which ranked first and second in retail sales growth, respectively. To counteract the downturn, Coca-Cola is collaborating with fast food chains like McDonald’s to incorporate its sodas into combo meals, specifically enhancing the fast food chain’s $5 meal deal that includes a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street’s expectations of $11.76 billion. The company also increased its forecast for organic revenue growth from 8-9% to 9-10%.
Similarly, Pepsi is finding it challenging to engage U.S. consumers as they shift towards healthier options and weight-loss products. In early July, Pepsi attributed its lackluster second quarter to a number of product recalls.