Consumers in the U.S. are increasingly choosing weight loss drugs and non-alcoholic alternatives, which is leading to a decline in soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, thanks in part to robust global demand for its beverages. This success prompted the company to increase its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the results, highlighting a notable growth in both revenue and operating income amid a changing market. However, volume sales in North America saw a decline of 1% during the quarter, which Quincey attributed to reduced consumption in away-from-home settings, affecting categories like water, sports drinks, coffee, tea, and soda.
To mitigate the volume loss, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meals, with reports indicating partnerships with McDonald’s to enhance meal deals that include soft drinks.
Despite the challenges, Coca-Cola exceeded Wall Street expectations, reporting second-quarter revenues of $12.4 billion, or approximately $0.84 per share, while analysts had predicted $11.76 billion and $0.81 per share. The company has adjusted its forecast for organic revenue growth to a range of 9% to 10%, up from a previous estimate of 8% to 9%.
Similarly, Pepsi is facing difficulties in capturing consumer interest in the U.S., as more individuals gravitate toward weight loss-focused and healthier lifestyle products. In early July, Pepsi cited several product recalls as a reason for its disappointing performance in the second quarter.