In the United States, the rise of weight loss medications and non-alcoholic alternatives has led consumers to pause their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, buoyed by global demand for its beverages. As a result, the company has raised its full-year financial outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance in a statement, highlighting solid growth in revenue and operating income amid a shifting market landscape.
However, the company’s volume sales in North America decreased by 1% during the quarter. Quincey noted that this decline was primarily due to reduced sales in “away-from-home channels,” which encompass offerings such as water, sports drinks, coffee, tea, and soda.
This decline was somewhat mitigated by the success of Coca-Cola’s Fairlife milk and its signature soda, which ranked first and second in retail sales growth for the quarter. To counteract lower soda sales, Coca-Cola is collaborating with food chains to include its sodas in combo meal deals, specifically partnering with McDonald’s to enhance its $5 meal offering, which features a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted the company would generate around $11.76 billion, or about $0.81 per share.
The company now anticipates organic revenue growth ranging between 9% and 10%, an increase from its earlier forecast of 8% to 9%.
Similarly, Pepsi is facing challenges reaching U.S. consumers, who are increasingly focused on weight loss and healthier choices. According to a Gallup poll, young adults in the U.S. are consuming significantly less alcohol than before. Pepsi attributed its lackluster second quarter in early July to a series of product recalls.