Consumers in the U.S. are increasingly hesitant to purchase sodas, influenced by the rise of weight loss drugs and non-alcoholic beverages. Despite this trend, Coca-Cola reported strong earnings for the second quarter, benefiting from high global demand for its products, which led the company to raise its full-year forecast.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, stating that the second-quarter results reflected solid growth in both revenue and operating income amidst a rapidly changing market.
However, the company experienced a 1% decline in volume sales in North America. Quincey attributed this drop to reduced purchases in away-from-home channels, encompassing water, sports drinks, coffee, tea, and sodas. This decline was somewhat mitigated by strong sales of Fairlife milk and positive retail performance of Coke, which ranked among the top in sales growth.
To address the sales slump, Coca-Cola is collaborating with fast-food chains to include its sodas in combo meals, especially working with McDonald’s to enhance the value of its $5 meal deal that includes a soft drink.
Overall, Coca-Cola exceeded analysts’ expectations with second-quarter revenues of $12.4 billion, amounting to about $0.84 per share, surpassing the anticipated $11.76 billion and $0.81 per share.
The company has revised its forecast for organic revenue growth to a range of 9% to 10%, up from the earlier estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in capturing the interest of U.S. consumers who are shifting towards weight-loss oriented and healthier options. In early July, Pepsi attributed its disappointing second-quarter results to a series of product recalls.