Weight loss medications and non-alcoholic beverages have led to a decline in soda purchases among consumers in the U.S.
Coca-Cola announced strong earnings for the second quarter, attributing its success to robust global demand for its products, prompting the company to raise its full-year forecasts. CEO James Quincey expressed optimism about the quarter’s performance, noting significant growth in both revenue and operating income despite challenging market conditions.
However, the company did experience a 1% decline in volume sales in North America. Quincey explained that this drop was influenced by weakening sales in away-from-home channels, which encompass a variety of beverages, including water, sports drinks, coffee, tea, and soda.
The decline was somewhat offset by the success of Coca-Cola’s Fairlife milk and its flagship soda, with Coke achieving top rankings in retail sales growth during the quarter. To further boost sales, Coca-Cola plans to collaborate with food chains to include its sodas in combo meals, particularly partners like McDonald’s, to enhance its meal offerings.
Financially, Coca-Cola outperformed Wall Street predictions, reporting second-quarter revenues of $12.4 billion, equivalent to approximately $0.84 per share. Analysts had expected revenue of $11.76 billion, or about $0.81 per share.
The company has revised its organic revenue growth forecast to between 9% and 10%, up from its earlier estimate of 8% to 9%.
In a similar vein, Pepsi has faced challenges in engaging U.S. consumers, who are increasingly favoring products that focus on weight management and healthier options. Moreover, younger Americans are reportedly consuming less alcohol than in previous years, according to a Gallup poll. Earlier this month, Pepsi cited product recalls as a key reason for its disappointing second-quarter performance.