In the United States, consumers are increasingly delaying purchases of sodas, influenced by the availability of weight loss medications and non-alcoholic alternatives.
Despite these trends, Coca-Cola reported impressive earnings for the second quarter, driven by strong worldwide demand for its beverages. The company has adjusted its full-year guidance upward as a result. CEO James Quincey expressed optimism regarding the results, emphasizing solid revenue and operating income growth amid a shifting market landscape.
However, the beverage giant did experience a 1% decline in volume sales within North America. Quincey attributed this decrease to reduced sales in away-from-home sectors, which include water, sports drinks, coffee, tea, and soda products. Notably, this decline was somewhat mitigated by the success of Fairlife milk and Coca-Cola’s flagship product, which saw significant growth in retail sales.
To combat the downward trend, Coca-Cola is collaborating with restaurant chains to incorporate its soft drinks into combo meal offerings. Reports indicate that the company is working with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Overall, Coca-Cola outperformed Wall Street expectations for the second quarter, reporting revenues of $12.4 billion, translating to approximately $0.84 per share. Analysts had predicted revenues of $11.76 billion and earnings of around $0.81 per share.
The company has now revised its forecast for organic revenue growth to a range of 9% to 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are becoming more health-conscious, with many opting for products that support weight loss. A recent Gallup poll indicates that young adults in the U.S. are also consuming less alcohol than in previous years. In early July, Pepsi attributed its lackluster second-quarter results to a series of product recalls.