In the United States, the rise of weight loss medications and non-alcoholic drink options is impacting soda sales. Despite this trend, Coca-Cola reported strong second-quarter earnings, driven largely by significant global demand for its beverages which has led the company to upgrade its full-year outlook.
Coca-Cola’s CEO, James Quincey, expressed optimism about their second-quarter performance, noting solid revenue and operating income growth in a dynamic market. However, in North America, sales volume saw a slight decline of 1% during the quarter. Quincey attributed this downturn in the U.S. division to weaker performance in out-of-home channels, including water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the success of Fairlife milk and the company’s flagship product, Coke, which recorded substantial retail sales growth. To counteract the decrease in volume, Coca-Cola is collaborating with food chains to incorporate its sodas into combo meal options, such as working with McDonald’s to enhance its $5 meal deal that comes with a soft drink.
Overall, Coca-Cola exceeded Wall Street projections with reported revenue of $12.4 billion for the second quarter, amounting to approximately $0.84 per share. Analysts had anticipated $11.76 billion in revenue, roughly $0.81 per share. The company now expects organic revenue growth to range between 9% and 10%, an increase from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in appealing to U.S. consumers, who are gravitating towards products that emphasize weight loss and healthier lifestyles. Additionally, Pepsi recently cited a series of product recalls as a contributing factor to its lackluster performance in the second quarter.