In the United States, the popularity of weight loss drugs and healthier beverage options has led many consumers to reduce their soda purchases.
Mars, the company behind M&M’s, has announced its acquisition of Kellanova, which produces Pop-Tarts, marking one of the year’s significant business deals.
Despite these trends, Coca-Cola reported strong earnings for the second quarter, boosted by robust global demand for its beverages. The company’s CEO, James Quincey, expressed optimism about their performance, stating they achieved solid revenue and operating income growth amidst a changing market.
However, Coca-Cola experienced a 1% decline in volume sales in North America within the same quarter. Quincey attributed this drop to a slowdown in away-from-home consumption, which encompasses water, sports drinks, coffee, tea, and sodas. To mitigate this decline, Coca-Cola’s Fairlife milk and its flagship soda, Coke, have performed well, ranking first and second in retail sales growth.
Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its sodas into combo meal deals to help counteract the sales dip.
The company surpassed Wall Street expectations, reporting $12.4 billion in revenue and earnings of about $0.84 per share. Analysts had anticipated a revenue of $11.76 billion or approximately $0.81 per share. Coca-Cola has raised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, has been facing challenges attracting U.S. consumers who are increasingly drawn to healthier and weight loss-focused products. In July, Pepsi cited several product recalls as a reason for its lackluster performance during the second quarter.