In the United States, consumers are increasingly hesitant to purchase sodas due to the popularity of weight loss medications and non-alcoholic alternatives.
Coca-Cola reported strong earnings for the second quarter, largely due to robust global demand for its beverages, leading the company to revise its full-year forecast upward. “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape,” stated James Quincey, CEO of Coca-Cola.
However, the company noted a 1% decline in volume sales in North America during this quarter. Quincey attributed this drop to weakened performance in away-from-home channels, which include water, sports drinks, coffee, tea, and sodas.
Despite the overall sales decline, Coca-Cola’s Fairlife milk and classic soda, Coke, performed well, ranking first and second in retail sales growth for the period. To counteract the volume loss, Coca-Cola is partnering with food chains to incorporate its sodas into combo meals, including efforts with McDonald’s to enhance its $5 meal deal that features a soft drink.
Coca-Cola exceeded Wall Street expectations with second-quarter revenue reaching $12.4 billion or approximately $0.84 per share, surpassing predictions of $11.76 billion or about $0.81 per share.
The company is now projecting organic revenue growth of 9% to 10%, an increase from its earlier forecast of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing the attention of American consumers, who are increasingly opting for weight management and healthier choices. This shift in drinking habits is reflected in a Gallup poll indicating that younger adults in the U.S. are consuming significantly less alcohol. In early July, Pepsi cited several product recalls as reasons for its lackluster second-quarter performance.