In the United States, the popularity of weight loss drugs and non-alcoholic beverage options has caused consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings on Tuesday, fueled by high global demand for its products and prompting the company to increase its full-year forecast.
CEO James Quincey expressed optimism about the results, highlighting solid growth in revenue and operating income despite a fluctuating market. However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey indicated that this drop stemmed from weakened performance in away-from-home sales channels, which encompass water, sports drinks, coffee, tea, and soda.
The decrease was partially mitigated by the success of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth during the quarter. To counteract the decline, Quincey mentioned that Coca-Cola is collaborating with food chains to integrate its soda into combo meals, specifically noting efforts with McDonald’s to enhance the fast food chain’s $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, equating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion, or about $0.81 per share.
The company has now revised its forecast for organic revenue growth, projecting an increase of 9% to 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers, who are leaning more towards products that emphasize weight loss and healthier lifestyles. A Gallup poll indicates a significant decline in alcohol consumption among young adults in the U.S. Earlier in July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.