Weight loss medications and non-alcoholic beverage options are causing consumers in the U.S. to hesitate in purchasing sodas. Nevertheless, Coca-Cola reported strong second-quarter earnings, bolstered by high global demand for its beverages, leading the company to increase its full-year forecasts.
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, the company experienced a 1% decline in volume sales during the quarter. Quincey noted that this decline was mainly due to “softness in away-from-home channels,” affecting categories like water, sports drinks, coffee, tea, and sodas.
Despite the overall decline, Coca-Cola highlighted the popularity of its Fairlife milk and the Coke brand, which ranked first and second in retail sales growth for the quarter. To combat the sales dip, Quincey mentioned that Coca-Cola is collaborating with food establishments to integrate its sodas into combo meal offerings. A partnership with McDonald’s is in place to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola’s performance exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, equating to about $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or approximately $0.81 per share.
The company has adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from its previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in capturing the U.S. market, with consumers increasingly favoring products that promote weight loss and healthier lifestyles. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In July, Pepsi attributed its subdued second-quarter performance to several product recalls.