Consumer preferences for weight loss medications and non-alcoholic beverages are leading to a decline in soda purchases in the United States.
McDonald’s is currently facing its first lawsuit linked to an E. coli outbreak associated with its Quarter Pounder.
Despite this, Coca-Cola announced strong second-quarter earnings, driven by strong global demand for its beverage products. The company has upgraded its full-year outlook as a result.
Coca-Cola CEO James Quincey expressed optimism about the company’s second-quarter performance, highlighting significant growth in top-line and operating income amid a changing market environment.
However, in North America, Coca-Cola experienced a 1% drop in volume sales during the quarter. Quincey explained that this decline was particularly influenced by reduced sales in “away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas.
This drop was somewhat mitigated by successes from Coca-Cola’s Fairlife milk and its flagship soda, which emerged as top performers in retail sales growth for the quarter.
To combat declining sales, Quincey stated that Coca-Cola is collaborating with food chains to include its sodas in combo meal offerings. Specifically, the company is working with McDonald’s to enhance the attraction of its $5 meal deal, which includes a soft drink.
Overall, Coca-Cola exceeded Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. Analysts had predicted revenues of around $11.76 billion, roughly $0.81 per share.
Looking ahead, the company has revised its forecast for organic revenue growth to between 9% and 10%, an increase from its prior estimate of 8% to 9%.
Similarly, Pepsi is encountering challenges in capturing the interest of U.S. consumers, who are increasingly leaning toward products emphasizing weight management and healthier lifestyles. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.