Consumers in the U.S. are increasingly turning to weight loss medications and non-alcoholic alternatives, leading to a slowdown in soda purchases.
Mars, known for its M&M products, is making headlines by acquiring Kellanova, the company behind Pop-Tarts, in a significant deal this year.
Despite this trend, Coca-Cola reported strong second-quarter earnings, fueled by robust global demand for its beverages. CEO James Quincey expressed optimism about the company’s performance in a statement.
However, in North America, Coca-Cola experienced a 1% decline in volume sales during the quarter. Quincey pointed out that this dip was largely due to weaker sales in venues outside the home, which encompass its range of products including water, sports drinks, coffee, tea, and soda.
The decline in volume was slightly balanced out by the success of Coca-Cola’s Fairlife milk and its core soda line, which ranked first and second in retail sales growth, respectively, for the quarter.
To combat the downturn, Coca-Cola is collaborating with food chains to integrate its sodas into combo meals. Reports indicate a partnership with McDonald’s to enhance the fast-food chain’s $5 meal deal that includes a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations with a reported revenue of $12.4 billion for the second quarter, translating to about $0.84 per share. Analysts had anticipated revenues of $11.76 billion, or approximately $0.81 per share. The company has now adjusted its forecast for organic revenue growth to between 9% and 10%, an increase from the earlier estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. customers, who are increasingly seeking healthier options and focusing on weight management. In early July, Pepsi attributed its lackluster second quarter performance to a series of product recalls.