The rise of weight loss drugs and non-alcoholic beverages has led to a decline in soda consumption among U.S. consumers. Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by global demand for its products, and subsequently raised its full-year expectations.
CEO James Quincey expressed optimism about the company’s performance, noting significant growth in both revenue and operating income within a rapidly changing market. However, the North American market saw a 1% decrease in volume sales during the quarter. Quincey attributed this decline to reduced consumer activity in “away-from-home channels,” which encompass various beverages including water, sports drinks, coffee, tea, and soda.
To mitigate the volume drop, Coca-Cola has focused on promoting its Fairlife milk and branding Coke as a leading product in retail sales. The company is also collaborating with food chains, such as McDonald’s, to integrate its soda in combo meal offers in an effort to bolster sales.
Despite the challenges, Coca-Cola exceeded Wall Street predictions, reporting $12.4 billion in revenue—approximately $0.84 per share—while analysts had anticipated $11.76 billion, or about $0.81 per share.
The beverage giant has adjusted its forecast for organic revenue growth, now projecting an increase of 9% to 10%, up from the previous estimate of 8% to 9%.
Pepsi, facing similar obstacles with U.S. consumers’ shift towards healthier options and weight loss products, reported a lackluster second quarter largely attributed to a series of product recalls.