Consumers in the U.S. are turning away from sodas, influenced by the rise of weight loss medications and non-alcoholic alternatives.
On a positive note, Coca-Cola reported strong second-quarter earnings on Tuesday, fueled by robust global demand for its beverages, which has led the company to raise its full-year projections. CEO James Quincey expressed optimism about the results, highlighting solid growth in revenue and operating income despite challenging conditions.
However, Coca-Cola saw a 1% decline in volume sales in North America during the quarter. Quincey noted that the decrease was attributed to “softness in away-from-home channels,” affecting its water, sports drinks, coffee, tea, and soda products.
The decline was somewhat mitigated by the success of Fairlife milk and Coke, which ranked first and second in retail sales growth for the quarter. To counter the volume drop, Quincey mentioned efforts to collaborate with fast-food chains, such as McDonald’s, to include Coke in combo meal deals.
Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue, which translates to approximately $0.84 per share. Analysts had anticipated revenue of $11.76 billion, or around $0.81 per share, according to FactSet.
The company has adjusted its forecast for organic revenue growth to between 9% and 10%, increasing its previous guidance of 8% to 9%.
Like Coca-Cola, Pepsi is facing challenges in winning over U.S. consumers, who are increasingly opting for products that promote weight loss and healthier lifestyles. A recent Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than before. In early July, Pepsi attributed its weaker second-quarter performance to a series of product recalls.