In the United States, the popularity of weight-loss medications and non-alcoholic alternatives is leading consumers to reduce their soda purchases.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by global demand for its beverage offerings, prompting the company to raise its full-year forecast. CEO James Quincey stated that the results reflected solid revenue and operating income growth amid a challenging market environment.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey noted that this decrease was largely due to a drop in sales across “away-from-home channels,” which encompass products such as water, sports drinks, coffee, tea, and sodas.
The decline was somewhat mitigated by the success of its Fairlife milk brand and its flagship product, Coke, which saw significant sales growth. To counteract the sales drop, Coca-Cola is collaborating with restaurant chains to include its beverages in combo meals, including efforts with McDonald’s to enhance the appeal of its $5 meal deal that comes with a soft drink.
Overall, the company’s performance exceeded Wall Street’s expectations, with second-quarter revenue reaching $12.4 billion or approximately $0.84 per share, beating the projected $11.76 billion and $0.81 per share.
Coca-Cola now anticipates organic revenue growth of 9% to 10%, an increase from its earlier estimate of 8% to 9%.
Pepsi, facing similar challenges in attracting U.S. consumers who are shifting towards healthier options, reported difficulties as well. The company attributed its lackluster second-quarter performance to a series of product recalls.