Consumers in the U.S. are increasingly opting for weight loss medications and non-alcoholic beverages, which has led to a decrease in soda sales.
Despite this trend, Coca-Cola reported strong earnings for the second quarter, largely due to high global demand for its beverages, prompting the company to revise its full-year guidance upwards.
Coca-Cola CEO James Quincey expressed optimism about the company’s results, highlighting solid growth in revenue and operating income despite a shifting market.
In North America, however, volume sales fell by 1% during the quarter. Quincey explained that the decline in the U.S. was influenced by weaker performance in away-from-home channels, encompassing categories such as water, sports drinks, coffee and tea, alongside traditional sodas.
The decline was somewhat mitigated by the success of its Fairlife milk and the Coca-Cola brand itself, which ranked first and second in retail sales growth for the quarter.
To combat the drop in sales, Coca-Cola is collaborating with restaurants, including McDonald’s, to include its sodas in combo meal deals. This strategy aims to enhance the appeal of fast-food offerings.
Overall, Coca-Cola exceeded Wall Street’s estimates, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or roughly $0.81 per share.
The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, increasing the previous estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are leaning towards healthier options and weight loss products. Moreover, Pepsi pointed to several product recalls as a factor contributing to its lackluster second-quarter performance.