In the United States, the rise of weight loss medications and non-alcoholic beverage options is affecting soda sales, leading to a shift in consumer behavior.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, supported by high global demand for its beverages. This success has prompted the company to revise its full-year financial outlook upward.
Coca-Cola CEO James Quincey expressed optimism about the company’s quarterly results, highlighting solid revenue and operating income growth amid a changing market landscape.
However, Coca-Cola experienced a 1% drop in volume sales in North America during the quarter. Quincey explained that the decline was primarily due to weaker sales in outlets outside of home consumption, which encompass their water, sports drinks, coffee, tea, and soda products.
This decrease was partially countered by sales of Fairlife milk and the Coca-Cola drink itself, which achieved notable retail sales growth during the period.
To address the sales drop, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meal deals. Reports suggest that the company is working with McDonald’s to enhance the appealing $5 meal deal that includes soft drinks.
Overall, Coca-Cola exceeded Wall Street predictions, generating $12.4 billion in revenue for the second quarter, amounting to approximately $0.84 per share, surpassing the expected $11.76 billion, or roughly $0.81 per share.
Additionally, Coca-Cola has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are increasingly inclined towards products that support weight loss and healthier lifestyle choices. A recent Gallup poll noted that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its lackluster second quarter performance to a series of product recalls.