Coca-Cola has reported strong earnings for the second quarter, attributed to a high demand for its beverages worldwide, even as weight loss drugs and non-alcoholic alternatives lead U.S. consumers to purchase fewer sodas. The company’s CEO, James Quincey, expressed optimism about the results, noting solid revenue and operating income growth during a challenging market.
Despite the overall success, Coca-Cola experienced a 1% decline in volume sales in North America. Quincey mentioned that the downturn was influenced by softer performance in away-from-home channels, which encompasses categories such as water, sports drinks, coffee, tea, and sodas. However, this decline was somewhat mitigated by growth in Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter.
To combat the decrease, Coca-Cola is collaborating with food chains like McDonald’s to integrate its sodas into meal combos, specifically aiming to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Coca-Cola’s revenue reached $12.4 billion in the second quarter, exceeding Wall Street expectations of $11.76 billion. The company also raised its forecast for organic revenue growth, now expecting between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing similar challenges as U.S. consumers shift towards healthier options, with a recent Gallup poll indicating that young adults are consuming less alcohol. In early July, Pepsi reported a lackluster second quarter, partly due to several product recalls.