Consumers in the U.S. are delaying soda purchases due to the rise of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its beverages, prompting the company to revise its full-year forecast upwards.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.” However, in North America, volume sales saw a decline of 1% during this period. Quincey attributed this drop to weaker performance in away-from-home venues, which encompass water, sports drinks, coffee, tea, and soda.
The decline was somewhat mitigated by strong sales of Fairlife milk and Coca-Cola, which ranked first and second in retail sales growth, respectively. To counteract the decrease in soda sales, Coca-Cola is collaborating with food chains to integrate its soft drinks into combo meals. Notably, the company is partnering with McDonald’s to enhance its $5 meal deal, which includes a soda.
Coca-Cola exceeded Wall Street projections in the second quarter, reporting revenue of $12.4 billion, approximately $0.84 per share. Analysts had anticipated the company would achieve $11.76 billion in revenue, or about $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly focused on weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its subdued second quarter to a series of product recalls.