Can PepsiCo's Zero Sugar & Dew Flavors Sustain PBNA's Share Gains?

PepsiCo, Inc.'s PEP PepsiCo Beverages North America (“PBNA”) division has been gaining momentum in 2025, thanks largely to the strength of its innovation-led beverage platforms, particularly Pepsi Zero Sugar and the expansion of the Mountain Dew flavor portfolio. These brands have become central to PBNA’s strategy as consumers increasingly gravitate toward bold flavors, functional attributes and zero-sugar options. With the segment already showing improved organic revenue trends and market-share gains, the question now is whether these fast-growing platforms can continue driving PBNA’s competitive edge in a crowded and highly promotional beverage landscape.

Pepsi Zero Sugar remains one of the company’s standout performers, delivering double-digit net revenue growth in the recent quarter. Backed by campaigns like the “Food Deserves Pepsi” platform and the Pepsi Zero Sugar Taste Challenge, the brand is attracting both loyal Pepsi drinkers and health-conscious switchers. PBNA’s broader zero-sugar strategy, across Pepsi, Mountain Dew and other brands, continues to resonate, offering strong margin potential and aligning with consumer trends favoring reduced sugar and functionality. If this momentum holds, Zero Sugar could remain a key engine for share growth across the carbonated soft drink category.

Meanwhile, Mountain Dew’s expanding flavor lineup is giving PBNA a strong edge with younger consumers and flavor-seeking shoppers. New varieties like HoneyDEW, Dragon Fruit and Baja Cabo Citrus, along with the billion-dollar success of Baja Blast, have revitalized the brand and boosted market momentum. If both Pepsi Zero Sugar and Dew’s flavor engine stay strong, PBNA is well positioned to preserve and even grow its share gains through 2025

KO & KDP: Driving Growth Through Innovation & Efficiency

Both The Coca-Cola Company KO and Keurig Dr Pepper Inc. KDP are navigating a shifting beverage landscape by combining innovation with disciplined cost management to sustain momentum.

Coca-Cola continues to leverage its global scale, strong brand equity and disciplined execution to drive steady growth. The company is benefiting from robust demand for its core sparkling brands, expanding zero-sugar offerings and premium innovations across categories like energy and hydration. With solid margin expansion in its latest quarter, KO is effectively balancing pricing, productivity initiatives and strategic marketing investments. Its broad international footprint remains both a strength and a challenge, fueling growth but exposing results to currency fluctuations.

Keurig Dr Pepper is leaning on productivity gains, innovation and a diversified beverage portfolio to navigate a mixed cost environment. While lingering input-cost pressures have weighed on margins, the company continues to post healthy revenue growth supported by strength in cold beverages, successful brand partnerships and ongoing expansion of its coffee ecosystem. KDP’s balanced approach, combining cost efficiencies, pricing actions and targeted investments in new product platforms, is helping offset inflationary headwinds.

PEP’s Price Performance, Valuation & Estimates

Shares of PepsiCo have gained 1.3% in the past three months compared with the industry’s growth of 4.5%.

From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 16.97X, slightly below the industry’s average of 18.01X.

The Zacks Consensus Estimate for PEP’s 2025 earnings implies a year-over-year decline of 0.7%, whereas the same for 2026 earnings indicates growth of 5.9%. The company’s EPS estimates for 2025 and 2026 have remained stable in the past seven days.

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

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