Consumer preferences for weight loss drugs and non-alcoholic beverages are impacting soda sales in the U.S. market.
McDonald’s is encountering its first legal challenge related to an E. coli outbreak linked to its Quarter Pounder.
Despite this, Coca-Cola reported strong earnings for the second quarter, fueled by robust global demand for its beverage products, leading the company to increase its full-year revenue forecast.
Coca-Cola’s CEO, James Quincey, expressed confidence in the company’s performance, stating, “We are encouraged with our second-quarter results, which delivered solid topline and operating income growth in an ever-changing landscape.”
However, the company did experience a 1% decrease in volume sales across North America. During the earnings call, Quincey attributed the decline in the U.S. market to reduced sales in “away-from-home channels,” which include water, sports drinks, coffee, tea, and sodas.
The drop in volume was somewhat mitigated by the success of Fairlife milk and Coca-Cola soda, which showed strong retail sales growth.
To counter the sales slump, Coca-Cola is collaborating with food chains, including McDonald’s, to incorporate its beverages into combo meal offerings. McDonald’s is looking to enhance its $5 meal deal, featuring a soft drink, as part of this partnership.
Overall, Coca-Cola exceeded analysts’ expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share. The forecast from Wall Street had predicted $11.76 billion in revenue, or about $0.81 per share.
The company has revised its organic revenue growth forecast to a range of 9% to 10%, up from previous estimates of 8% to 9%.
Pepsi, similarly, has faced challenges in attracting the attention of U.S. consumers, who are increasingly opting for products that emphasize weight management and healthier habits. A recent Gallup poll noted that young adults in the U.S. are consuming much less alcohol than before. In early July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.