Consumers in the U.S. are increasingly turning away from sodas, influenced by the rise of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, partly due to robust global demand for its products, and has raised its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid growth in revenue and operating income amidst a changing market. Nevertheless, volume sales in North America fell by 1% for the quarter, largely attributed to decreased sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda.
The decline in volume was somewhat countered by the success of Fairlife milk and the classic Coke brand, which ranked first and second in retail sales growth, respectively. To combat falling sales, Quincey mentioned that Coca-Cola is collaborating with food chains like McDonald’s to integrate its sodas into combo meals, enhancing their value offerings.
Overall, Coca-Cola outperformed Wall Street estimates, posting $12.4 billion in revenue, translating to about $0.84 per share, surpassing forecasts of $11.76 billion and $0.81 per share. The company has revised its organic revenue growth expectations to between 9% and 10%, increased from the earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing the interest of U.S. consumers as they shift towards healthier options, including those aimed at weight loss. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.