The demand for weight loss medications and non-alcoholic beverages has led many consumers in the U.S. to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from robust global demand for its beverages, which resulted in an increase in its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income amid a challenging market environment. However, the company did experience a 1% decline in volume sales in North America. Quincey attributed this decrease to reduced consumption in away-from-home categories, which include beverages such as water, sports drinks, coffee, tea, and soda.
The volume drop was somewhat mitigated by the success of Fairlife milk and the Coca-Cola soda brand, which saw significant growth in retail sales during the quarter. To further address the decline in soda sales, Quincey noted that Coca-Cola is collaborating with food chains to integrate its drinks into meal combos. The company has been particularly focused on working with McDonald’s to enhance the fast food chain’s $5 meal deal that includes a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street’s expectations, which had predicted revenue of $11.76 billion. The company also raised its forecast for organic revenue growth to between 9% and 10%, up from its previous outlook of 8% to 9%.
Pepsi, like Coca-Cola, has faced challenges in attracting U.S. consumers who are shifting towards healthier choices and weight loss products. Earlier in July, Pepsi attributed its lackluster second quarter to a series of product recalls.