In the United States, the rise of weight loss medications and a growing preference for non-alcoholic beverages are causing consumers to shy away from soda products. Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by robust global demand for its beverages, which led the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, noting solid growth in revenue and operating income despite the changing market conditions. However, the company did experience a 1% decline in volume sales in North America, attributed to “softness in away-from-home channels” that encompass its range of water, sports drinks, coffee, tea, and soda products.
The decrease in sales volume was somewhat mitigated by the success of Fairlife milk and the company’s flagship beverage, Coke, which ranked first and second in retail sales growth for the quarter. To combat the sales decline, Quincey indicated that Coca-Cola is partnering with food chains to incorporate its sodas into combo meals, with efforts aimed at enhancing McDonald’s $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, or about $0.81 per share.
Looking ahead, Coca-Cola revised its forecast for organic revenue growth, now projecting an increase between 9% and 10%, up from a previous estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges in attracting U.S. consumers, who are increasingly leaning towards healthier products, including those aimed at weight loss. The company recently cited several product recalls as factors contributing to its lackluster performance in the second quarter.