Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic alternatives, which has impacted sodas sales.
McDonald’s has found itself in legal trouble as the first lawsuit has emerged related to the E. coli outbreak linked to its Quarter Pounder.
Despite the challenges faced, Coca-Cola announced strong earnings for the second quarter on Tuesday, which were boosted by robust global demand for its beverage products. This financial performance led the company to revise its full-year forecast upwards.
Coca-Cola CEO James Quincey expressed satisfaction with the second-quarter results, highlighting solid revenue and operating income growth amid a dynamic market environment.
However, in North America, the company saw a 1% decline in volume sales during the quarter. Quincey noted that this decline in its U.S. branch was influenced by weaker sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas.
This downturn was somewhat mitigated by strong performances from Fairlife milk and Coke, which ranked first and second in retail sales growth, respectively. To combat the decline, Coca-Cola is collaborating with various food chains, including McDonald’s, to integrate its soda products into meal deals, such as McDonald’s $5 meal that includes a soft drink.
Overall, Coca-Cola outperformed Wall Street predictions, generating $12.4 billion in revenue for the second quarter, equating to roughly $0.84 per share. Analysts had expected revenue of around $11.76 billion, or approximately $0.81 per share.
The company raised its forecast for organic revenue growth from 8% to 9% to a new estimate of 9% to 10%.
In a similar vein, Pepsi is also facing difficulties in attracting U.S. consumers, who are leaning towards healthier products and weight loss solutions. A recent Gallup poll indicated that young adults in the U.S. are consuming significantly less alcohol than before. Earlier in July, Pepsi attributed its underwhelming second-quarter performance to a series of product recalls.