Weight loss medications and non-alcoholic beverages are causing consumers in the United States to hesitate in their soda purchases.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, attributing their success to robust global demand for their products, which led the company to revise its full-year forecasts upward.
Coca-Cola’s CEO, James Quincey, expressed optimism about the second-quarter results, highlighting substantial revenue and operating income growth in a changing market.
However, in North America, the company experienced a 1% decline in volume sales during the quarter. Quincey noted that the U.S. division’s volume drop was largely due to “softness in away-from-home channels,” which encompasses categories like water, sports drinks, coffee, tea, and sodas.
This decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter.
To counteract the volume decrease, Coca-Cola is collaborating with fast-food chains to incorporate their sodas into combo meal deals. Reports indicated that the company is working with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Overall, Coca-Cola surpassed Wall Street projections, reporting $12.4 billion in revenue for the second quarter, equating to about $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or roughly $0.81 per share.
The company has adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers, who are increasingly focused on weight loss and healthier choices. A Gallup poll noted that young adults in America are consuming significantly less alcohol than in the past. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.