Weight loss medications and non-alcoholic beverages are causing a decline in soda consumption among U.S. consumers. Despite this trend, Coca-Cola announced strong second-quarter earnings, fueled by high global demand for its beverage products, prompting the company to raise its full-year revenue guidance.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating,, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, the company reported a 1% drop in volume sales within North America for the quarter. Quincey attributed this decline to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and sodas.
The downturn was counterbalanced somewhat by sales from its Fairlife milk brand and its flagship soda, Coke, which saw significant retail sales growth during the quarter.
To combat the declining sales, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals, working particularly with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Coca-Cola exceeded Wall Street’s expectations with second-quarter revenues of $12.4 billion, or approximately $0.84 per share, outperforming the anticipated $11.76 billion and $0.81 per share.
The company has adjusted its organic revenue growth forecast to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Like Coca-Cola, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly opting for products that focus on weight loss and healthier lifestyles. Pepsi attributed its weaker second-quarter performance to several product recalls.