Weight loss medications and non-alcoholic alternatives have led to decreased soda purchases among consumers in the United States.
Amid these changes, Coca-Cola reported strong second-quarter earnings, benefiting from robust global demand for its beverages, prompting the company to revise its full-year outlook upward.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter results, highlighting solid growth in both revenue and operating income in a dynamic market.
However, in North America, the company saw a 1% decline in volume sales during the quarter. Quincey attributed this decrease primarily to weak performance in away-from-home channels, which encompass water, sports drinks, coffee, tea, and soda.
Despite the decline, Coca-Cola noted that its Fairlife milk and the Coke brand both experienced significant growth in retail sales.
To counteract the volume drop, Quincey indicated that Coca-Cola is collaborating with food chains to make their soda a staple of combo meals. The company is reportedly partnering with McDonald’s to enhance the fast food chain’s $5 meal deal, which includes a soft drink.
Coca-Cola exceeded Wall Street expectations in revenue, reporting $12.4 billion, roughly $0.84 per share, surpassing analysts’ forecasts of $11.76 billion, or about $0.81 per share.
The company has now revised its forecast for organic revenue growth to between 9% and 10%, up from the previous prediction of 8% to 9%.
Similarly, Pepsi has faced challenges in engaging U.S. consumers, who are increasingly opting for products that promote weight loss and healthier lifestyles. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.