Weight loss medications and non-alcoholic beverages are leading American consumers to purchase fewer sodas.
Despite this trend, Coca-Cola reported solid financial results for the second quarter, largely due to strong global demand for its beverages. The company has since raised its full-year revenue projections. CEO James Quincey expressed optimism regarding the company’s growth, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
In North America, however, Coca-Cola experienced a 1% drop in volume sales. Quincey attributed this decline to “softness in away-from-home channels,” affecting categories such as water, sports drinks, coffee, tea, and sodas. Nonetheless, Coca-Cola’s Fairlife milk and its flagship soda, Coke, performed well, ranking first and second in retail sales growth during the quarter.
To combat the sales dip, Coca-Cola is collaborating with food chains to incorporate its soda into combo meals, including partnerships with McDonald’s to enhance its $5 meal deal that features a soft drink.
Coca-Cola’s revenue of $12.4 billion for the second quarter surpassed Wall Street’s expectations, which anticipated $11.76 billion in revenue. The company is now projecting organic revenue growth between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
PepsiCo is also facing challenges in attracting U.S. consumers as they shift towards healthier options and weight loss products. In early July, Pepsi attributed its weaker second-quarter performance to a series of product recalls.