Consumers in the U.S. are increasingly delaying soda purchases due to the popularity of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by global demand for its beverages. The company has raised its full-year outlook following a solid performance.
James Quincey, Coca-Cola’s CEO, expressed optimism about their second-quarter results, highlighting significant growth in revenue and operating income amid a shifting market landscape. However, Coca-Cola experienced a 1% decline in volume sales in North America. Quincey attributed this drop to a reduction in sales from “away-from-home channels,” which includes water, sports drinks, coffee, tea, and soda.
The volume decrease was somewhat mitigated by the company’s Fairlife milk brand and Coca-Cola’s own soft drink, which ranked first and second in retail sales growth for the quarter. Quincey noted that Coca-Cola is collaborating with food chains to incorporate its beverages into combo meal offers. Notably, the company is working with McDonald’s to enhance its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street’s predictions with second-quarter revenues of $12.4 billion, translating to approximately $0.84 per share, surpassing the anticipated $11.76 billion or $0.81 per share.
The company is now forecasting organic revenue growth of 9% to 10%, an increase from its earlier estimate of 8% to 9%.
Meanwhile, Pepsi is facing challenges in attracting U.S. consumers who are increasingly favoring health-oriented products. The decline has been compounded by a series of product recalls mentioned in their subdued second-quarter report earlier this month.