Weight loss medications and non-alcoholic alternatives are leading consumers in the U.S. to reduce their soda purchases.
Despite this trend, Coca-Cola announced strong second-quarter earnings, buoyed by solid global demand for its beverages, which has prompted the company to adjust its full-year outlook upward.
CEO James Quincey expressed optimism about the company’s performance, highlighting significant growth in revenue and operating income amid market changes.
In North America, however, Coca-Cola saw a 1% decline in volume sales during the quarter. Quincey attributed this drop to weaker sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda.
This decline was partially mitigated by success from its Fairlife milk brand, as well as positive performance from Coke, which ranked first and second in retail sales growth for the quarter.
To counter the volume decrease, Coca-Cola is collaborating with food chains to include its soda in combo meals. The company is reportedly working with McDonald’s to enhance its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded analysts’ predictions for the quarter, reporting revenue of $12.4 billion, or about $0.84 per share. Analysts had anticipated $11.76 billion in revenue and earnings of approximately $0.81 per share.
The company has now increased its forecast for organic revenue growth to a range of 9% to 10%, up from a prior estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly opting for products focused on weight loss and healthier lifestyles. Recently, Pepsi attributed its subdued second-quarter performance to a series of recalls.