In the United States, consumers are increasingly opting for weight loss medications and non-alcoholic alternatives, leading to a decline in soda purchases. Despite this trend, Coca-Cola announced strong second-quarter earnings, buoyed by global demand for its beverage products. The company raised its full-year guidance in response.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, highlighting solid revenue and operating income growth amid changing market conditions. However, the company’s volume sales in North America fell by 1% this quarter. Quincey attributed this decrease to weaker performance in away-from-home channels, which include products like water, sports drinks, coffee, tea, and soda.
The decline in volume was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth during the quarter. To counteract the dip in sales, Coca-Cola is collaborating with fast-food chains to incorporate its sodas into combo meals, including a partnership with McDonald’s aimed at enhancing the value of a $5 meal deal.
Coca-Cola exceeded Wall Street expectations with reported second-quarter revenue of $12.4 billion, or approximately $0.84 per share, surpassing forecasts of $11.76 billion and $0.81 per share. The company has raised its forecast for organic revenue growth to a range of 9% to 10%, up from the prior estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier lifestyle choices. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi cited multiple product recalls as a factor contributing to its lackluster second-quarter performance.