In the United States, consumers are increasingly turning to weight loss medications and non-alcoholic alternatives, which has led to a decline in soda purchases. Despite this shift, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its beverages, prompting the company to raise its full-year revenue projections.
James Quincey, CEO of Coca-Cola, expressed satisfaction with the company’s second-quarter performance, noting solid growth in both revenue and operating income amid changing market conditions.
However, Coca-Cola did see a 1% decline in volume sales in North America during the quarter. Quincey pointed out that this drop was influenced by weaker performance in “away-from-home channels,” which encompass its water, sports drinks, coffee, tea, and soda categories.
To mitigate this decline, Coca-Cola has emphasized its Fairlife milk products and its signature soda, Coke, both of which were among the top-performing products in retail sales growth for the quarter. To counteract volume reductions, the company is collaborating with fast food chains, including McDonald’s, to incorporate its sodas into combo meals.
Despite the challenges, Coca-Cola surpassed Wall Street expectations with second-quarter revenues of $12.4 billion, equating to approximately $0.84 per share, which exceeded forecasts of $11.76 billion and $0.81 per share, according to FactSet.
The company has revised 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 experiencing difficulties in engaging U.S. consumers, who are increasingly favoring options centered around weight loss and health. Earlier in July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.