Consumers in the U.S. are increasingly opting for weight loss drugs and non-alcoholic alternatives, which has affected soda sales.
Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, fueled by global demand for its products, leading the company to raise its full-year projections. CEO James Quincey expressed optimism about the results, noting significant topline and operating income growth in a dynamic market.
Nevertheless, North America experienced a 1% decline in volume sales for the quarter. Quincey attributed this reduction to “softness in away-from-home channels,” which encompasses water, sports drinks, coffee, tea, and sodas.
Coca-Cola mentioned that this decline was somewhat mitigated by its Fairlife milk brand and its flagship soda, Coke, which ranked first and second in retail sales growth, respectively.
To counteract the sales dip, Coca-Cola is collaborating with food chains to integrate its beverages into combo meal offers. The company is reportedly working with McDonald’s to enhance the appeal of its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenue of $11.76 billion, or about $0.81 per share.
The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Pepsi, like Coca-Cola, has faced challenges attracting U.S. consumers, particularly as they shift towards products that focus on weight loss and healthier choices. A Gallup poll revealed a significant decline in alcohol consumption among young adults in the U.S. Earlier this month, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.