Weight loss medications and non-alcoholic alternatives are causing a dip in soda purchases among consumers in the United States. Despite this trend, Coca-Cola announced strong second-quarter earnings, fueled by high global demand for its beverages, leading the company to raise its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about the quarter’s results, highlighting solid growth in both revenue and operating income amid a shifting market landscape.
Nonetheless, volume sales in North America fell by 1% during the quarter. Quincey noted that the decline in the U.S. sector was influenced by “softness in away-from-home channels,” affecting its offerings, including water, sports drinks, coffee, tea, and sodas.
This decline was slightly mitigated by the performance of Fairlife milk and Coca-Cola itself, which ranked highly in retail sales growth.
To combat the decrease, Coca-Cola is collaborating with food chains to include its sodas in combo meals. It is reportedly working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which features a soft drink.
Coca-Cola surpassed Wall Street expectations with second-quarter earnings of $12.4 billion or approximately $0.84 per share, compared to analyst forecasts of $11.76 billion and about $0.81 per share.
The company has now increased its forecast for organic revenue growth to between 9% and 10%, revising its earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are leaning towards products that promote weight loss and healthier lifestyles. Earlier in July, Pepsi attributed its underwhelming second-quarter performance to a series of product recalls.