Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss medications and non-alcoholic beverage options. Despite this trend, Coca-Cola reported strong second-quarter earnings, benefiting from robust global demand for its products and prompting the company to raise its full-year projections.
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, the company experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed this decrease to “softness in away-from-home channels,” which encompass water, sports drinks, coffee, tea, and soda sales.
This volume drop was somewhat mitigated by growth in its Fairlife milk brand and its flagship soda, Coke, which achieved notable retail sales growth.
To combat the decline, Coca-Cola is collaborating with fast food chains to include its soda in combo meals, with efforts aimed at enhancing McDonald’s $5 meal deal that features a soft drink.
Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter—about $0.84 per share—compared to analysts’ predictions of $11.76 billion, or approximately $0.81 per share.
The company has now increased its forecast for organic revenue growth to between 9% and 10%, up from its previous estimate of 8% to 9%.
Pepsi is also facing challenges in the U.S. market as consumers lean towards healthier options focused on weight loss. In early July, Pepsi attributed its lackluster second-quarter performance to several product recalls.