Coca-Cola sold less soda in North America in the latest quarter, with the company blaming unusually bad weather for weak results at home and abroad.
Still, the drop continues a trend that has seen declines in three of the past four quarters amid criticism that sugary drinks fuel obesity rates.
The world’s largest beverage company, which also makes Dasani, Minute Maid and Powerade, said on Tuesday that its second-quarter profit fell by 4%. Global volume rose 1%, boosted by sales in emerging markets. But in North America, volume slipped 1%.
“I hate to use the weather, but a lot of it was the weather,” Chief Financial Officer Gary Fayard said in an interview on CNBC, apparently acknowledging the frequency with which companies blame the weather when they deliver disappointing results.
When asked whether people drink less soda when it’s cold and wet outside, Fayard said that was indeed the case.
“We are an industry that’s susceptible to weather,” he said.
Coke’s shares were down 2% in midmorning trading.
The impact of the weather clouded the underlying challenges Coca-Cola has been facing in North America and other developed markets, where soda’s image is coming under fire. Earlier this year, for example, Coca-Cola began airing TV ads addressing obesity for the first time.
Increased awareness around health issues are affecting sales
Along with rival PepsiCo Inc., which reports its second-quarter results next week, Coca-Cola is also trying to come up with a soda that uses a natural, low-calorie sweetener. The challenge is that such sweeteners often have a bad aftertaste. Notably, Coca-Cola has not rolled out a midcalorie version of Fanta and Sprite using stevia that it tested last summer.
Nevertheless, executives at both companies have expressed optimism that natural, lower-calorie sodas can halt the industry’s slide.
Coca-Cola, based in Atlanta, has also been pushing its bottled teas, water and sports drinks. It sold more of such uncarbonated drinks in North America for the period, but not enough to offset the decline in sodas.
During the quarter, volume for Europe also declined by 4%, with Coca-Cola noting the impact of severe flooding in parts of Germany and central Europe.
Looking ahead to the second half of the year, however, executives expressed confidence that the weather would even out and that results would improve.