Can Coca-Cola's Zero Sugar Portfolio Drive Its Volume Growth?

The Coca-Cola Company’s KO expanding Zero Sugar portfolio has emerged as a central pillar of its long-term growth strategy as the company looks to reignite volume momentum in a world where consumers are increasingly health-conscious but unwilling to compromise on taste. With demand shifting toward lower- and no-sugar options across both developed and emerging markets, Coca-Cola is leveraging its scale, brand equity and reformulation capabilities to capture incremental consumption occasions while protecting the relevance of its core franchises.

Management has consistently highlighted Coca-Cola Zero Sugar as one of the company’s fastest-growing global trademarks, delivering strong volume gains and share expansion across multiple regions. In fourth-quarter 2025, Coca-Cola delivered 1% unit case volume growth, despite tough comparisons and macro pressure, with Zero Sugar variants cited as an important contributor to brand-level strength. The company has now posted value-share gains for 19 consecutive quarters, underscoring that volume trends are being supported by mix improvement rather than heavy discounting. While full-year 2025 volumes were flat, management highlighted sequential improvement through the fourth quarter, with Zero Sugar offerings helping offset softness in higher-sugar segments and supporting more balanced growth between price and volume.

Looking ahead, Coca-Cola’s Zero Sugar portfolio is positioned to play an even larger role in driving volumes as distribution widens and execution improves at the point of sale. With organic revenue growth guided at 4-5% for 2026 and a more balanced contribution expected between pricing and volume, Zero Sugar products provide a scalable pathway to sustain consumption growth in a health-conscious environment.

PEP vs. KDP: Zero- and Low-Sugar Strategies in Focus

Peers such as PepsiCo Inc. PEP and Keurig Dr Pepper Inc. KDP are also leaning into zero- and low-sugar portfolios as key volume drivers, highlighting a broader industry shift toward health-oriented growth without sacrificing scale or profitability.

PepsiCo continues to see its zero-sugar portfolio as a critical component of long-term volume growth, with Pepsi Zero Sugar emerging as one of its fastest-growing beverage trademarks. Management has repeatedly noted that zero-sugar variants are driving incremental consumption and attracting younger consumers while also helping balance pricing actions across the portfolio. Beyond colas, PepsiCo’s broader zero- and low-sugar strategy spans sports drinks and flavored beverages, enhancing its ability to capture health-oriented demand across multiple occasions.

Keurig has been using its zero- and low-sugar portfolio as a meaningful driver of volume stability and incremental growth, particularly in the U.S. carbonated soft drink and flavored beverage categories. Management has highlighted continued strength in zero-sugar variants of Dr Pepper and Crush, which have helped offset broader category softness and supported household penetration gains. The company has also benefited from disciplined pricing and strong at-home consumption trends, allowing zero-sugar offerings to contribute to volume resilience without relying on aggressive promotions.

The Zacks Rundown for Coca-Cola

KO’s shares have risen 9.9% in the past three months compared with the industry’s growth of 13.2%.

From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 24.48X, higher than the industry’s 20.32X.

The Zacks Consensus Estimate for KO’s 2026 and 2027 earnings implies year-over-year growth of 7.7% and 7.5%, respectively. Earnings estimates for both years have inched up by a penny in the past 30 days.

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

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

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