In the United States, the rise of weight loss drugs and non-alcoholic beverage options has led to a decline in soda purchases. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by high global demand for its products, prompting the company to increase its full-year projections.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid revenue and operating income growth amid a changing market landscape. However, the company did experience a 1% decline in volume sales in North America during the quarter, attributed to decreased sales in away-from-home channels, which include water, sports drinks, coffee, tea, and sodas.
The volume decline was somewhat offset by the success of Fairlife milk and Coca-Cola’s flagship soda, which ranked first and second in retail sales growth for the quarter. To combat the drop in soda sales, Quincey mentioned that Coca-Cola is collaborating with fast food chains to incorporate their beverages into combo meals, including working with McDonald’s to enhance its $5 meal deal.
Coca-Cola’s financial performance exceeded Wall Street’s expectations, reporting $12.4 billion in revenue for the second quarter, equating to approximately $0.84 per share, while analysts had anticipated $11.76 billion or roughly $0.81 per share. The company has revised its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Meanwhile, PepsiCo is facing challenges in appealing to U.S. consumers, who are increasingly focused on weight loss and healthier lifestyles. A recent Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi cited multiple product recalls as a factor contributing to its disappointing second-quarter performance.