Weight loss medications and non-alcoholic alternatives are causing U.S. consumers to rethink their soda purchases.
Coca-Cola announced solid second-quarter earnings, buoyed by strong global demand for its products, prompting the beverage leader to raise its forecasts for the year. CEO James Quincey expressed optimism, noting that the company’s performance showed consistent revenue and operating income growth amid a shifting market landscape.
However, sales volume in North America dipped by 1% for the quarter. Quincey highlighted that the decline was influenced by reduced activity in away-from-home venues, which encompass products like water, sports drinks, coffee, tea, and soda.
Despite this, the downturn was somewhat offset by sales from Fairlife milk and Coca-Cola itself, which ranked among the top two in retail sales growth during this period. To counteract the volume loss, Coca-Cola is collaborating with fast-food restaurants to integrate its sodas into combo meals, including efforts with McDonald’s to enhance its $5 meal deals that feature soft drinks.
Coca-Cola exceeded Wall Street’s expectations, reporting revenues of $12.4 billion, or approximately $0.84 per share, compared to forecasts of $11.76 billion and about $0.81 per share. The company now anticipates organic revenue growth of 9% to 10%, a revision of its previous forecast of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are increasingly focused on healthier lifestyles and weight loss. A recent Gallup poll revealed a noticeable decline in alcohol consumption among young adults in the U.S. Additionally, Pepsi attributed its lackluster second quarter to several product recalls occurring in early July.