Can Coca-Cola's Revenue Growth Management Fuel Next-Leg of Upside?

The Coca-Cola Company’s KO Revenue Growth Management (“RGM”) strategy has emerged as a critical lever in sustaining momentum amid a complex consumer backdrop. Management emphasized that sharper RGM execution, spanning pricing, pack architecture and channel mix, helped keep organic revenue growth at the high-end of the company’s long-term algorithm in third-quarter 2025, even as inflationary pressures and uneven demand persisted. 

In third-quarter 2025, Coca-Cola’s revenues grew 5% to $12.46 billion, with organic revenues up 6% and value share gains in key markets. Rather than relying solely on pricing, Coca-Cola has leaned into a more balanced approach, combining disciplined price actions with mix optimization to protect affordability while still driving value.

A key pillar of RGM has been refining brand-price-pack architecture to meet diverging consumer needs. In North America, the company highlighted how smaller pack sizes, such as mini cans, are directly addressing affordability concerns while also supporting revenue growth, with mini cans now representing a $1-billion revenue stream. 

At the same time, Coca-Cola is leveraging premium offerings, like Topo Chico, smartwater and fairlife, to enhance mix, demonstrating RGM’s dual role in supporting both accessibility and premiumization. Similar strategies are being deployed across emerging markets, where management noted more localized pricing and pack interventions to respond to macro pressures without sacrificing brand strength.

Coca-Cola views RGM as tightly linked to execution and system capabilities. Management pointed out that recent volume and revenue acceleration was driven less by an improving environment and more by targeted RGM actions, closer collaboration with bottlers, and faster decision-making at the local level. As pricing normalizes with easing inflation, Coca-Cola expects RGM to increasingly fuel growth through mix, innovation and affordability-led gains, positioning it as a key driver of the company’s next leg of upside.

Focus on KO’s Peers: Are PEP & KDP’s Strategies Paying off?

As Coca-Cola sharpens execution, attention turns to whether PepsiCo Inc. PEP and Keurig Dr Pepper Inc. KDP are seeing returns from their strategies.

PepsiCo’s revenue growth strategies appear to be gaining traction, driven by sharper price-pack architecture, portfolio reshaping and disciplined revenue management. In third-quarter 2025, the company accelerated organic revenue growth by optimizing promotions, expanding affordable pack sizes and focusing on permissible and functional offerings. These initiatives, combined with innovation and channel expansion, are helping PepsiCo improve volumes, sustain pricing discipline and strengthen momentum amid a value-conscious consumer backdrop.

Keurig Dr Pepper’s revenue growth initiatives appear to be delivering results, supported by disciplined pricing, favorable mix and strong brand execution. Management highlighted solid net sales growth in third-quarter 2025, driven by effective revenue management, single-serve coffee momentum, and resilient performance in flavored CSDs and refreshment beverages. Continued focus on innovation, pack-price optimization and distribution expansion is helping KDP sustain growth despite a cautious consumer environment.

The Zacks Rundown for Coca-Cola

KO shares have risen 13.6% in the past year compared with the industry’s growth of 9.6%.

From a valuation standpoint, Coca-Cola trades at a forward price-to-earnings ratio of 21.45X, significantly higher than the industry’s 17.84X.

The Zacks Consensus Estimate for KO’s 2025 and 2026 earnings implies year-over-year growth of 3.5% and 8%, respectively. Earnings estimates for 2025 and 2026 have been unchanged in the past 30 days.

Coca-Cola currently carries a Zacks Rank #4 (Sell).

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

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