Weight loss medications and a rise in non-alcoholic beverage choices are contributing to a slowdown in soda sales among U.S. consumers. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from increased global demand for its beverage products, leading the company to raise its full-year revenue expectations.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting solid growth in both revenue and operating income despite a challenging market. However, in North America, the company experienced a 1% decline in volume sales, with Quincey attributing this dip to a decrease in sales across “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas.
The drop in volume was somewhat mitigated by strong sales of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the quarter. To combat the decline, Coca-Cola is collaborating with various food chains, including McDonald’s, to incorporate its beverages into combo meal options.
Coca-Cola’s second quarter results outperformed Wall Street expectations, reporting revenues of $12.4 billion, translating to approximately $0.84 per share, exceeding analysts’ forecasts of $11.76 billion or roughly $0.81 per share. The company has now adjusted its projection for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Pepsi, similarly, has faced challenges in capturing the interest of health-conscious U.S. consumers. The company noted that a series of recalls contributed to its lackluster performance in the second quarter.