The Coca-Cola Company’s bid to overcome weak volume growth with pricing seems to have worked in Q2.
The soda giant reported a 1% increase in operating revenue against a 1% drop in volume and a 6% bump in pricing during the quarter, per earning results released on Tuesday. Operating income jumped 63% during the quarter and is up 66% for the first six months of the year.
In North America, unit case volume fell 1% against a 3% increase in price/mix; operating income grew 18%. The U.S. market showed sequential volume improvement, and restored brand equity scores among Hispanic consumers by late June after targeted advertising addressed earlier declines
The earnings call also revealed Coke’s plans for a cane sugar-sweetened version of its flagship Cola, coming just days after President Trump claimed to have negotiated with company executives to change the formula; more on that here. The President’s drink of choice, Diet Coke, marked its fourth consecutive quarter of volume growth in North America amid rising traction with young consumers online. Coca-Cola Zero Sugar, Fanta, BodyArmor and Powerade also each grew during Q2.
In dairy, Fairlife’s double-digit volume growth was moderated due to capacity constraints, the company said, expected to be alleviated when the brand’s New York manufacturing site comes online in early 2026.
In response to a question, Quincey praised Coke’s U.S. business for “a very strong job coming back from a slower start in Q1 and getting sequentially better in Q2.” The consumer is “pretty resilient overall and “aggregate spend is holding up,” he noted.
The company also says its brand equity scores with Hispanic consumers have rebounded to levels at the start of the year after a backlash in Q1 sparked by a viral online video purportedly showing Coca-Cola sending Immigration and Customers Enforcement (ICE) officers to seize undocumented workers. Coke called the video “unequivocally false.”
Costa Coffee Stalls
Coca-Cola’s big-ticket bid to become a major player in coffee (its fourth attempt, Quincey noted for the record) appears to have fizzled, as the CEO acknowledged during the Q&A session of the call that “our [$5 billion] investment in Costa [Coffee] is not where we want it to be from an investment hypothesis.”
Costa “is still a good business,” Quincey argued, but attempts to balance its brick-and-mortar stores with ready-to-drink products and at-home coffee prep have largely failed.
“I think I would say we’re in the mode of reflecting on what we’ve learned thinking about how we might want to find new avenues to grow in the coffee category while continuing to run the cost of business successfully,” he said. “because it’s still a lot of money we put down, and we wanted that money to work as hard as possible.”