Consumers in the U.S. are showing a preference for weight loss medications and non-alcoholic beverages, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from high global demand for its products, which enabled the company to raise its full-year financial outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid growth in both revenue and operating income despite the evolving market conditions. However, the company’s North American volume sales dipped by 1% during the quarter. Quincey attributed this decline to reduced sales in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
The decrease in sales was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its flagship cola, which ranked first and second in retail sales growth, respectively. To combat the downward trend, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meal deals. Notably, the company is working with McDonald’s to enhance its $5 meal deal by including a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street predictions of $11.76 billion. The company reported earnings of approximately $0.84 per share, surpassing the anticipated $0.81. In light of these results, Coca-Cola has adjusted its forecast for organic revenue growth, now projecting an increase between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly inclined toward healthier options and weight loss products. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.