Weight loss medications and alcohol alternatives are causing a shift in consumer behavior, leading to reduced soda purchases in the United States. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by significant global demand for its beverage products, prompting the company to raise its full-year revenue forecasts.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, noting substantial growth in both revenue and operating income. However, the company did experience a 1% decline in volume sales in North America during the quarter, attributed to weakened sales in away-from-home channels, which encompass various beverage offerings including soda.
To counter this decline, Coca-Cola has been collaborating with food chains to incorporate its beverages into meal deals. Notably, the company is working with McDonald’s to enhance the fast-food chain’s $5 meal deal, which includes a soft drink.
In terms of financial performance, Coca-Cola exceeded expectations, reporting $12.4 billion in revenue for the second quarter, translating to about $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share forecast by Wall Street analysts.
The company has consequently updated its outlook for organic revenue growth to a range of 9% to 10%, an increase from its prior estimate of 8% to 9%.
Pepsi, like Coca-Cola, is facing challenges in attracting U.S. consumers who are increasingly prioritizing healthier choices and weight management products. Additionally, Pepsi has cited a series of product recalls as a factor contributing to its lackluster performance in the second quarter.