In the United States, the emergence of weight loss drugs and non-alcoholic alternatives has led to a decrease in soda purchases among consumers. Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely due to significant global demand for its beverage offerings. This success prompted the company to raise its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting the solid growth in revenue and operating income amid a changing market. However, the company experienced a 1% decline in volume sales within North America during this quarter. Quincey noted that the decrease was influenced by weaker sales in “away-from-home channels,” which includes its water, sports drinks, coffee, tea, and soda products.
To mitigate the volume decline, Coca-Cola is focusing on partnerships with food service chains to integrate its sodas into meal deals. The company is collaborating with McDonald’s to enhance the fast-food chain’s $5 meal deal, which features a soft drink.
Coca-Cola exceeded Wall Street’s expectations with second-quarter revenues of $12.4 billion, translating to earnings of approximately $0.84 per share. Analysts had predicted revenue of $11.76 billion, or about $0.81 per share. The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi is facing similar challenges in attracting U.S. consumers, who are increasingly opting for products that emphasize weight loss and healthier lifestyles. The company reported a subdued second quarter, partially attributing this to a series of product recalls.