In the United States, the growing popularity of weight loss drugs and non-alcoholic beverages is affecting soda sales. A recent survey revealed that most Americans do not consider themselves wealthy, even if they have a million dollars.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, thanks to significant global demand for its products, which led the company to raise its full-year projections. CEO James Quincey expressed optimism about the second-quarter results, highlighting solid revenue and operating income growth in a shifting market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey noted that this decrease was primarily due to reduced sales in “away-from-home channels,” encompassing water, sports drinks, coffee, tea, and soda. This decline was somewhat mitigated by robust sales of Fairlife milk and its flagship soda, Coke, which ranked first and second in retail sales growth for the quarter.
To combat the drop in soda sales, Coca-Cola is collaborating with restaurant chains to integrate its beverages into combo meals, including efforts with McDonald’s to enhance the fast-food chain’s $5 meal deal that features a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share. Analysts had anticipated revenue of about $11.76 billion, or around $0.81 per share. The company also revised its forecast for organic revenue growth to between 9% and 10%, an increase from its earlier prediction of 8% to 9%.
Pepsi is facing similar challenges in attracting U.S. consumers, who are increasingly gravitating towards health-conscious products, including those aimed at weight loss. In early July, Pepsi attributed its underwhelming second-quarter performance to a number of product recalls.