Consumers in the U.S. are becoming more hesitant to purchase sodas, influenced by the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, attributed in part to robust global demand for its beverages. The company has raised its full-year guidance following these results.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting solid growth in income and sales during a challenging market environment. However, the North American market experienced a 1% decline in volume sales, primarily due to reduced sales in away-from-home locations that include water, sports drinks, coffee, tea, and soda.
To counteract this decline, Coca-Cola has been enhancing its partnerships with food chains, aiming to include its soda in combo meals. Collaborations with McDonald’s are particularly focused on promoting the fast-food chain’s $5 meal deal, which features a soft drink.
In terms of financial results for the second quarter, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue, equating to approximately $0.84 per share. Analysts had predicted the company would generate around $11.76 billion, or about $0.81 per share. Following these promising results, Coca-Cola revised its forecast for organic revenue growth to a range between 9% and 10%, an increase from the prior estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in gaining traction with U.S. consumers who are shifting their focus toward healthier options and weight loss products. Recent data shows young adults in the U.S. are consuming significantly less alcohol than in previous years. Pepsi attributed its lackluster performance in the second quarter to various product recalls.