Consumers in the U.S. are delaying soda purchases due to the rise of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, spurred by robust global demand for its beverage products, leading the company to revise its annual forecasts upwards.
Coca-Cola’s CEO, James Quincey, expressed satisfaction with the second-quarter performance, highlighting significant revenue and operating income growth in a dynamic market. However, the company’s volume sales in North America dipped by 1%, which Quincey attributed to weaker sales in away-from-home channels that encompass water, sports drinks, coffee, tea, and sodas.
The sales decline was partially mitigated by the success of Fairlife milk and Coca-Cola, which ranked highly in retail sales growth during the same period. To counteract declining volumes, Coca-Cola is collaborating with fast-food chains like McDonald’s to integrate its products into combo meals, such as the popular $5 meal deal that includes a soft drink.
Coca-Cola surpassed Wall Street’s projections with second-quarter revenues of $12.4 billion, translating to approximately $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or roughly $0.81 per share. Following these results, the company adjusted its forecast for organic revenue growth to 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 increasingly inclined towards healthier options and weight loss products. Earlier in July, the company attributed its lackluster second quarter to several product recalls.