Consumers in the U.S. are increasingly delaying soda purchases due to the popularity of weight loss drugs and non-alcoholic alternatives. Despite this trend, Coca-Cola reported strong second-quarter earnings, benefiting from high global demand for its beverages and subsequently raised its full-year guidance.
Coca-Cola’s CEO, James Quincey, expressed optimism about the company’s performance, noting solid revenue and operating income growth despite a shifting market landscape. However, in North America, the company experienced a 1% decline in volume sales, attributed to weaker performance in various channels, including water, sports drinks, coffee, tea, and soda products.
The slight dip in sales was somewhat mitigated by the success of Fairlife milk and the popularity of Coca-Cola itself, which ranked highly in retail sales growth during the quarter. To combat the downward trend, Quincey mentioned that Coca-Cola is collaborating with restaurant chains to include its sodas in combo meals, specifically working with McDonald’s to enhance its $5 meal deal, which features a soft drink.
Coca-Cola’s revenues for the second quarter reached $12.4 billion, surpassing Wall Street’s expectations of $11.76 billion. The company’s earnings per share stood at about $0.84, exceeding the forecast of $0.81. Furthermore, Coca-Cola has increased its forecast for organic revenue growth to between 9% and 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi has faced challenges in attracting U.S. consumers who are shifting towards healthier options and weight loss products. In early July, Pepsi attributed its lackluster second-quarter performance to a number of product recalls.