In the United States, weight loss medications and a rise in non-alcoholic drink preferences have led consumers to reduce their soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, bolstered by high global demand for its beverages, which prompted the company to increase its full-year projections.
Coca-Cola CEO James Quincey expressed satisfaction with the company’s second-quarter performance, noting substantial growth in both revenue and operating income amidst a shifting market landscape.
However, the company did experience a 1% decline in volume sales in North America during the quarter. Quincey indicated that this decline was primarily due to weaker sales in away-from-home channels, which includes water, sports drinks, coffee, tea, and soda products.
This decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth, respectively, during the quarter. To counterbalance the drop in sales, Coca-Cola is collaborating with restaurant chains to integrate its soda into combo meals. Notably, efforts are being made with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, surpassing Wall Street expectations. Analysts had predicted the company would earn around $11.76 billion. The company now anticipates organic revenue growth between 9% and 10%, up from its earlier forecast of 8% to 9%.
Meanwhile, Pepsi is also facing challenges in attracting U.S. consumers who are increasingly leaning towards healthier choices and weight loss products. The company recently cited a series of product recalls as a factor contributing to its lackluster performance in the second quarter.