The rise of weight loss drugs and non-alcoholic beverage alternatives has led to a decline in soda consumption among U.S. consumers.
Despite these challenges, Coca-Cola reported strong earnings for the second quarter, which were bolstered by high global demand for its beverages. The company’s CEO, James Quincey, expressed optimism about their performance, stating that the results indicate solid growth in a changing market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this drop to weaker sales in away-from-home channels, which encompass a range of products including water, sports drinks, coffee, tea, and sodas. Notably, the decline was partially mitigated by strong sales of Fairlife milk and growth in Coke’s retail sales.
Quincey mentioned that the company is collaborating with food establishments to integrate soda into combo meals, specifically highlighting efforts with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded market predictions, reporting revenue of $12.4 billion for the second quarter, translating to about $0.84 per share, surpassing Wall Street’s forecast of $11.76 billion, or approximately $0.81 per share. The company has increased its projected organic revenue growth to between 9% and 10%, up from a previous estimate of 8% to 9%.
Similarly, Pepsi is facing difficulties in engaging U.S. consumers, who are increasingly gravitating towards healthier and weight loss-focused products. This was compounded by a series of recalls that affected Pepsi’s performance in the second quarter.