Coca-Cola Holds Value Share Lead Despite Latin America Flatline

The Coca-Cola Company’s KO Latin America business hit a soft patch in third-quarter 2025, with flat unit case volumes, despite solid brand execution. Growth in water, sports, coffee and tea categories was offset by a decline in Trademark Coca-Cola. In the third quarter, revenues declined 4% in Latin America, driven by 3% decline in concentrate sales and 8% impact from currency headwinds, offset by 7% increase in price/mix. The slowdown reflected broader macroeconomic headwinds in key markets such as Mexico, where consumer pressures and policy shifts, including sugar-tax adjustments, weighed on demand.

Management acknowledged that while the company’s interventions, including sharper revenue growth management, innovation and marketing, have shown encouraging early signs, a sustained recovery in Mexico will take time. 

However, the company gained global value share in the total non-alcoholic ready-to-drink beverages category, driven by share gains in Brazil and Argentina in the third quarter of 2025. Brazil remained a standout, led by Coca-Cola Zero Sugar and the successful rollout of dual packs and refillable packaging that linked the brand more closely with meal occasions. Meanwhile, Santa Clara continued to outperform in Mexico, emerging as the leader in value-added dairy, underscoring Coca-Cola’s ability to leverage local innovation and portfolio diversification to buffer regional volatility.

While short-term growth remains constrained by inflationary and regulatory pressures, Coca-Cola’s fundamentals in Latin America remain resilient. Its disciplined focus on affordability, mix optimization and brand equity investments supports pricing power and long-term value creation. As the macro backdrop stabilizes, Coca-Cola’s deep distribution network and agile execution with bottling partners position it to reaccelerate growth while maintaining its dominance in the region’s nonalcoholic beverage landscape.

KO’s Competition

PepsiCo, Inc. PEP and Monster Beverage Corporation MNST are the beverage companies competing with Coca-Cola.

PepsiCo, a beverage behemoth and Coca-Cola’s key competitor, continues to emphasize value leadership by offering a sturdy balance of affordability, innovation and brand equity across its beverage and snacks portfolio. PEP leverages broad distribution strength across traditional retail, convenience, e-commerce, and foodservice to deliver strong value visibility at multiple price points. Despite the inflationary pressures, PepsiCo has sustained volume share and strengthened value perception through disciplined pricing and other efforts.

Monster Beverage leads the market in delivering strong consumer value and maintaining share in key price segments. Monster Beverage continues to uphold its value leadership in the global energy drinks category, supported by sustained brand equity, strategic innovation and disciplined pricing. The company’s balanced approach to product mix and promotional investments has helped it defend market share and deliver consistent growth, even amid competitive and inflationary pressures. MNST continues to review opportunities for higher prices, domestically and internationally.

KO’s Price Performance, Valuation and Estimates

Shares of Coca-Cola have gained 15.3% year to date compared with the industry’s growth of 7.6%.

From a valuation standpoint, KO trades at a forward price-to-earnings ratio of 22.46X compared with the industry’s average of 18.09X.

The Zacks Consensus Estimate for KO’s 2025 and 2026 earnings per share (EPS) implies year-over-year growth of 3.5% and 8%, respectively. The estimates for 2025 and 2026 have increased by a penny in the past 30 days.

Coca-Cola stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research