Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic alternatives, leading to a slowdown in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, which were bolstered by a high global demand for its beverages. This positive performance has prompted the company to raise its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism regarding the company’s second-quarter performance, highlighting substantial growth in both revenue and operating income amidst a shifting market landscape. However, the North American market saw a 1% decline in volume sales during the quarter. Quincey attributed this drop to reduced sales in away-from-home channels, including categories such as water, sports drinks, coffee, tea, and soda.
The decline in volume sales was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its flagship beverage, Coke, which ranked among the top products for retail sales growth in the quarter. To counteract the downward trend, Coca-Cola is collaborating with food chains to integrate its beverages into combo meal offerings, including a partnership with McDonald’s to enhance its $5 meal deal that features a soft drink.
Despite the overall volume dip, Coca-Cola exceeded analysts’ expectations with second-quarter revenues of $12.4 billion, amounting to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, or about $0.81 per share.
The company now anticipates organic revenue growth of 9% to 10%, up from its previous forecast of 8% to 9%.
Similarly, Pepsi has faced challenges in the U.S. market as consumers shift their focus toward healthier products and weight loss solutions. In early July, Pepsi reported lackluster earnings for the second quarter, attributing the results to a series of product recalls.