Weight loss medications and non-alcoholic alternatives are causing consumers in the U.S. to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by robust global demand for its beverage offerings, prompting the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the quarter’s results, highlighting solid revenue and operating income growth in a changing market. However, in North America, volume sales declined by 1%, largely due to weakened performance in away-from-home channels, including its water, sports drinks, coffee and tea, and soda products.
The drop in volume was somewhat mitigated by the success of Coca-Cola’s Fairlife milk brand and its flagship soda, which saw significant retail sales growth during the quarter. To counter the sales decline, Quincey mentioned that Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals. Notably, discussions with McDonald’s are underway to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting revenue of $12.4 billion for the second quarter, equivalent to approximately $0.84 per share, surpassing analysts’ forecasts of $11.76 billion, or roughly $0.81 per share.
The company now predicts organic revenue growth between 9% and 10%, an increase from its earlier projection of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier lifestyle choices. A Gallup poll indicates that young adults in the U.S. are consuming considerably less alcohol than in the past. In early July, Pepsi cited a series of product recalls as a contributing factor to its lackluster second-quarter performance.