In the United States, the rise of weight loss medications and non-alcoholic drink options is causing consumers to hesitate when purchasing sodas.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, buoyed by strong global demand for its beverages, which led the company to increase its full-year forecasts.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the company’s second-quarter performance, highlighting solid growth in both revenue and operating income amidst changing market conditions.
However, Coca-Cola did experience a 1% decline in volume sales in North America. Quincey pointed out that this decrease was linked to a downturn in away-from-home channels, impacting sales across water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth during the quarter. To counteract the volume loss, Coca-Cola is collaborating with food chains to include its sodas in combo meal offerings, including discussions with McDonald’s regarding its $5 meal deal.
Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the quarter, translating to about $0.84 per share, surpassing forecasts of $11.76 billion and $0.81 per share. The company has revised its expectation for organic revenue growth, now forecasting increases between 9% and 10%, up from an earlier estimate of 8% to 9%.
Pepsi is also facing challenges in attracting U.S. consumers, who are leaning towards weight loss-focused and healthier alternatives. In early July, Pepsi cited a series of product recalls as a factor contributing to its lackluster second-quarter results.