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Coca-Cola (KO) , which owns popular drink brands such as Diet Coke, Fanta, Sprite, and Dasani, has had a rough start to 2025. The company recently noticed an unexpected shift in customer behavior, and its CEO is flagging the source of the problem.
In Coca-Cola’s first-quarter earnings report for 2025, the company revealed that its concrete sales in the U.S. declined by 4% year-over-year during the quarter, despite increasing revenue in the region.
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The company’s unit case volume across the nation declined by 3%, which it claims is due to decreases in “trademark Coca-Cola and water, sports, coffee, and tea.”
Related: PepsiCo CEO addresses major customer concerns amid low sales
In addition to a decline in U.S. sales, Coca-Cola saw its net revenue shrink by 2% year-over-year, generating only $11.1 billion during the quarter.
Coca-Cola CEO calls out a major issue
During an earnings call on April 30, Coca-Cola CEO James Quincey said that the company is “not satisfied” with its recent volume performance in the U.S. and that it is starting to lose a vital group of customers.
“In North America, we grew revenue and profit and won value share, but we were not satisfied with our volume performance,” said Quincey. “In addition to challenges with severe weather and calendar shift, volume was impacted by weakening consumer sentiment as the quarter progressed, particularly among Hispanic consumers.”
Coca-Cola’s loss of Hispanic customers comes after a video went viral on social media platform TikTok in February, alleging the drink company laid off "thousands of Latin American workers" and reported them to Immigration and Customs Enforcement. In response to this video, some consumers said that they would be boycotting the company.
Related: Domino’s Pizza suffers a startling loss as customers switch gears
Quincey seemingly addressed the video during the earnings call, claiming that it contained “false” information that impacted sales during the first quarter.
“I think as it relates very specifically, firstly to the false video, I think that’s largely in the rearview mirror in terms of its virality and affecting the business,” said Quincey. “It wasn’t the first piece of misinformation, disinformation, or anything else nefarious about the Coca-Cola brand, and I’m sure it won’t be the last. But we are very focused on recovering from it.”
To add fuel to the fire, the “Latino Freeze Movement,” which was developed in response to President Donald Trump's crackdown on immigration and rollback of diversity, equity, and inclusion initiatives, is encouraging Latinos to not buy from companies that are allegedly connected to the Trump administration or have recently scaled back their DEI programs.