Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter results on Tuesday, boosted by global demand for its beverages, prompting the company to revise its full-year projections upward.
“We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape,” said Coca-Cola CEO James Quincey.
However, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this downturn to “softness in away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda.
This decline was partially alleviated by the growth of Fairlife milk and strong sales of Coke itself, which ranked first and second in retail sales growth during the quarter.
To counteract decreasing volumes, Quincey noted that Coca-Cola is collaborating with food chains to include its soda in combo meals. The company is reportedly working with McDonald’s to enhance its $5 meal deal, which comes with a soft drink.
Overall, Coca-Cola outperformed Wall Street predictions by generating $12.4 billion in revenue during the second quarter, translating to approximately $0.84 per share. Analysts had anticipated the company would report $11.76 billion in revenue, about $0.81 per share.
Coca-Cola has raised its forecast for organic revenue growth to between 9% and 10%, up from the earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly opting for products that support weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.