Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from significant global demand for its beverages, leading the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting “strong topline and operating income growth in an ever-changing landscape.” Nonetheless, the company saw a 1% decline in volume sales in North America, attributed to “softness in away-from-home channels,” which include its offerings of water, sports drinks, coffee, tea, and sodas.
The decline was partially compensated by growth in its Fairlife milk brand and the flagship Coca-Cola, which ranked first and second in retail sales growth, respectively. To combat the dip in sales, Quincey mentioned that Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals, particularly working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, surpassing Wall Street expectations of $11.76 billion. The company reported earnings of approximately $0.84 per share, exceeding the anticipated $0.81 per share. Following this performance, Coca-Cola increased its forecast for organic revenue growth to between 9% and 10%, up from an earlier prediction of 8% to 9%.
Similarly, Pepsi is facing challenges in appealing to U.S. consumers who are leaning towards healthier options and weight loss products. The company attributed its lackluster second quarter to a series of recalls.