Weight loss medications and non-alcoholic alternatives have led to a decrease in soda purchases among consumers in the U.S.
Despite these trends, Coca-Cola reported strong earnings for the second quarter. Global demand for its beverage products contributed to the company raising its full-year forecast. CEO James Quincey expressed optimism regarding the company’s performance, citing solid growth in revenue and operating income despite the challenging market conditions.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the same quarter. Quincey indicated that this decline in the U.S. was influenced by weaker sales in away-from-home channels, which encompass its water, sports drinks, coffee, tea, and soda lines.
The decline was partially mitigated by robust sales of its Fairlife milk and Coke products, which ranked first and second in retail sales growth, respectively. To improve sales, the company is collaborating with food chains to incorporate its soda into combo meals. Reports suggest that Coca-Cola is working with McDonald’s to enhance the fast food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, recording $12.4 billion in revenue, or approximately $0.84 per share, surpassing the projected $11.76 billion in revenue, which was about $0.81 per share.
The company has adjusted its organic revenue growth forecast to between 9% and 10%, an increase from the prior estimate of 8% to 9%.
PepsiCo is facing similar challenges in attracting U.S. consumers who are increasingly focused on health-conscious and weight loss-oriented products. Earlier in July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.