In the United States, the rise of weight loss medications and non-alcoholic alternatives has led consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter of the year, thanks in part to high global demand for its beverage products, prompting the company to raise its full-year outlook.
In a statement, Coca-Cola CEO James Quincey expressed optimism about the second-quarter results, highlighting significant growth in both revenue and operating income despite the shifting market dynamics. However, the company experienced a 1% decline in volume sales in North America. Quincey attributed this drop to decreased consumption in “away-from-home channels,” which encompasses its water, sports drinks, coffee, tea, and soda offerings.
Coca-Cola noted that its Fairlife milk products and its classic soda, Coke, helped mitigate some of the decline, with these items ranking first and second in retail sales growth during the quarter. To address the sales drop, Quincey mentioned that Coca-Cola is collaborating with restaurant chains to incorporate its soda into combo meals. Reports indicate that the company is working with McDonald’s to enhance the appeal of its $5 meal deal that includes a soft drink.
Despite the challenges, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share, compared to the anticipated $11.76 billion and $0.81 per share.
Looking ahead, Coca-Cola has adjusted its forecast for organic revenue growth to between 9% and 10%, increasing its previous estimate of 8% to 9%.
Similarly, Pepsi has encountered difficulties in attracting U.S. consumers, who are increasingly favoring products that promote weight loss and healthier lifestyles. In early July, Pepsi attributed its disappointing second quarter to a series of product recalls.