Weight loss medications and non-alcoholic alternatives are leading American consumers to reduce their soda purchases. Nevertheless, Coca-Cola reported strong earnings for the second quarter, driven by high global demand, prompting the company to raise its annual forecasts.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s results, noting solid growth in revenue and operating income amid a changing market. However, in North America, the company experienced a 1% decline in volume sales, attributed to weaker performance in away-from-home channels, including water, sports drinks, tea, and sodas.
This volume drop was partially offset by sales of its Fairlife milk and Coca-Cola, which ranked first and second in retail sales growth during the quarter. To boost sales, Coca-Cola is collaborating with food chains like McDonald’s to integrate its beverages into combo meal offers, particularly enhancing the fast-food chain’s $5 meal deal.
Despite the decline in certain areas, Coca-Cola exceeded Wall Street’s expectations with second-quarter revenues of $12.4 billion, translating to about $0.84 per share, surpassing the projected $11.76 billion and earnings of $0.81 per share.
The company has now raised its forecast for organic revenue growth to a range of 9% to 10%, adjusting from an earlier estimate of 8% to 9%.
Similarly, PepsiCo has faced challenges in attracting U.S. consumers, who are increasingly inclined toward weight loss and health-conscious products. Pepsi reported subdued results for the second quarter in early July, attributing this to several product recalls.