Consumers in the U.S. are increasingly turning to weight loss medications and non-alcoholic alternatives, causing a decline in soda purchases. Despite this trend, Coca-Cola reported strong second-quarter earnings, driven by high global demand for its beverages, and adjusted its full-year outlook upwards.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income amidst a changing market landscape.
However, in North America, Coca-Cola’s volume sales dropped by 1%. Quincey attributed this decline to reduced sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas. The decrease was somewhat mitigated by contributions from Fairlife milk products and Coca-Cola itself, which led in retail sales growth during the quarter.
To counter the volume decline, Coca-Cola is collaborating with restaurant chains to incorporate its sodas into combo meals. Reports indicate efforts with McDonald’s to enhance its $5 meal deal, which comes with a soft drink.
Overall, Coca-Cola exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had anticipated revenue of around $11.76 billion, or about $0.81 per share.
The company now projects organic revenue growth of 9% to 10%, increasing its previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in appealing to U.S. consumers, many of whom are focused on weight loss and healthier lifestyle choices. In early July, Pepsi attributed its muted second-quarter results to a number of product recalls.