U.S. consumers are increasingly hesitant to buy sodas due to the influence of weight loss drugs and non-alcoholic beverages. Despite this trend, Coca-Cola reported strong earnings for the second quarter on Tuesday, buoyed by high global demand for its products. This performance has led the beverage company to raise its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the results, highlighting notable growth in both revenue and operating income amid a challenging environment. However, the company did experience a 1% drop in volume sales in North America, which Quincey attributed to weaker performance in out-of-home channels, including water, sports drinks, coffee, tea, and sodas.
The decline in sales was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter. To bolster sales further, Quincey mentioned initiatives to integrate Coke into combo meals at restaurants, specifically partnering with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Coca-Cola’s revenue for the second quarter reached $12.4 billion, exceeding analysts’ expectations of $11.76 billion. The company is now forecasting organic revenue growth of 9% to 10%, an increase from its earlier estimate of 8% to 9%.
In a similar vein, Pepsi has faced challenges in capturing the interest of U.S. consumers, who are shifting towards products that promote weight loss and healthier lifestyle choices. Recent data indicates significant declines in alcohol consumption among young adults in the U.S. Additionally, Pepsi attributed its lackluster second quarter to a series of product recalls.