Consumers in the U.S. are increasingly delaying soda purchases due to the rising popularity of weight loss medications and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong earnings for the second quarter, fueled by global demand for its beverages, leading the company to raise its full-year forecast.
Coca-Cola CEO James Quincey expressed optimism about the company’s performance, highlighting solid revenue and operating income growth in a shifting market. However, the company experienced a 1% decline in volume sales in North America, which Quincey attributed to decreased activity in away-from-home channels, including water, sports drinks, coffee, tea, and soda.
The decline in sales was somewhat balanced by the success of Fairlife milk and significant retail sales growth of its flagship soda, Coke, which ranked first and second in its category. To counteract the drop in sales, Coca-Cola is collaborating with food chains to incorporate its soda options into combo meals, including initiatives with McDonald’s to enhance its $5 meal deal.
Coca-Cola’s financial results exceeded Wall Street forecasts, reporting $12.4 billion in revenue for the quarter, translating to approximately $0.84 per share, versus the anticipated $11.76 billion and $0.81 per share. The company has now revised its prediction for organic revenue growth to between 9% and 10%, an increase from its earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in appealing to U.S. consumers who are leaning toward healthier options and weight loss products. In early July, Pepsi reported a subdued second quarter, citing several product recalls as a contributing factor to its performance.