In the United States, the rising popularity of weight loss drugs and non-alcoholic beverage alternatives is leading consumers to hesitate when purchasing sodas. Despite this trend, Coca-Cola announced strong second-quarter earnings, driven by robust global demand, which prompted the company to increase its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income despite the challenging market conditions. However, volume sales in North America fell by 1% during the quarter. Quincey attributed this decline to a decrease in away-from-home consumption channels, affecting its range of products, including water, sports drinks, coffee, tea, and soda.
The dip in volume was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which were among the leading products in retail sales growth for the quarter. To counteract the sales decline, Coca-Cola is collaborating with food chains to incorporate its soda into combo meals, with reported efforts to enhance the $5 meal deal with McDonald’s that includes a soft drink.
Coca-Cola surpassed Wall Street predictions, posting $12.4 billion in revenue for the second quarter, translating to earnings of around $0.84 per share. Analysts had anticipated revenue of $11.76 billion, approximately $0.81 per share. The company now expects organic revenue growth of 9% to 10%, an increase from its previous estimate of 8% to 9%.
PepsiCo is facing similar challenges as consumers in the U.S. shift toward weight-conscious products. In early July, Pepsi cited several product recalls as a reason for its lackluster second-quarter performance, reflecting the ongoing challenges the industry faces amid changing consumer preferences.