In the United States, the rise of weight loss medications and non-alcoholic beverage options is leading consumers to reduce their soda purchases.
Despite this trend, Coca-Cola announced strong second-quarter earnings, driven by increased global demand for its beverages, allowing the company to raise its full-year projections.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting solid revenue and operating income growth amid changing market conditions.
However, the company saw a 1% decline in volume sales in North America for the quarter. Quincey pointed out that this decline stemmed from weaker sales in away-from-home channels, which include water, sports drinks, coffee, tea, and sodas.
The decline was somewhat mitigated by strong sales of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth.
To address the drop in volume, Coca-Cola is collaborating with restaurant chains to include its soda in combo meals. The beverage giant is reportedly partnering with McDonald’s to enhance the fast food chain’s $5 meal deal, which features a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations with second-quarter revenue of $12.4 billion, equating to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or roughly $0.81 per share.
The company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly favoring health-focused products. A recent Gallup poll indicated that young adults in the U.S. are significantly reducing their alcohol consumption. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.