Declining soda sales in the U.S. are attributed to the rise of weight loss drugs and non-alcoholic beverage options, impacting major companies such as Coca-Cola and Pepsi.
Despite these challenges, Coca-Cola reported strong second-quarter earnings, driven by robust global demand for its products, leading the company to increase its full-year revenue projections. CEO James Quincey expressed optimism, noting solid growth in topline and operating income amid a shifting market.
However, the company faced a 1% decline in volume sales in North America, largely due to reduced consumer engagement in away-from-home channels like restaurants and cafes. Quincey highlighted the decline was slightly offset by sales of Fairlife milk and its flagship soda, Coca-Cola, which performed well in retail sales growth.
To counter declining soda consumption, Coca-Cola is collaborating with restaurants to include its beverages in combo meals. The company is reportedly working with McDonald’s to enhance the appeal of its $5 meal deal, which includes a soft drink.
Coca-Cola’s second-quarter revenue reached $12.4 billion, exceeding Wall Street’s predictions of $11.76 billion, and earnings were reported at approximately $0.84 per share. Following these results, the company raised its forecast for organic revenue growth to a range of 9% to 10%, up from the previous estimate of 8% to 9%.
Pepsi, similarly, is experiencing difficulties appealing to U.S. consumers who are increasingly focused on healthier lifestyle choices. In July, the company cited a series of product recalls as factors contributing to its lackluster second-quarter performance.