Consumers in the U.S. are increasingly turning to weight loss drugs and non-alcoholic beverages, resulting in a decrease in soda sales.
McDonald’s is currently facing its first lawsuit linked to the E. coli outbreak associated with its Quarter Pounder.
Despite this challenge, Coca-Cola reported impressive second-quarter earnings, bolstered by strong global demand for its beverages, which led the company to revise its full-year expectations upward. CEO James Quincey expressed optimism, stating that the results indicated solid growth in both revenue and operating income amid a changing market.
However, Coca-Cola experienced a 1% decline in volume sales in North America during the quarter. Quincey attributed the dip to “softness in away-from-home channels,” which encompass water, sports drinks, coffee, tea, and sodas. The drop was partly balanced out by sales of Fairlife milk and Coca-Cola itself, which ranked first and second in retail sales growth for the period.
To counteract the downturn, Coca-Cola is collaborating with food chains like McDonald’s to incorporate its sodas into combo meals. This partnership aims to enhance McDonald’s $5 meal deal that features a soft drink.
Overall, Coca-Cola surpassed Wall Street expectations, reporting $12.4 billion in revenue for the second quarter, translating to approximately $0.84 per share, compared to analysts’ predictions of $11.76 billion and $0.81 per share.
The company has adjusted its forecast for organic revenue growth to a range of 9% to 10%, up from the previous estimate of 8% to 9%.
Similarly, Pepsi is facing challenges in attracting U.S. consumers who are increasingly gravitating toward healthier and weight-focused products. A Gallup poll indicates that young adults in the U.S. are consuming significantly less alcohol than in previous years. Earlier in July, Pepsi attributed its lackluster second-quarter performance to a series of product recalls.