PepsiCo Bets on Innovation: Will It Boost Global Market Share?

PepsiCo, Inc.’s PEP growth strategy revolves around innovation as a key lever to strengthen global market share. The company is actively transforming its product portfolio to better align with evolving consumer preferences, focusing on functionality, health and affordability. From sodium and sugar reduction to introducing more permissible snacks and beverages with cleaner labels, PepsiCo is pushing toward modernizing legacy brands while capturing demand in emerging consumer niches. For instance, innovations in smaller pack sizes and dual price-point strategies are helping maintain relevance across income segments, particularly in North America’s pressured convenience and multipack channels.

In the beverages category, the company is sharpening its focus on zero-sugar offerings and expanding into functional hydration, powders and tablets. Pepsi Zero Sugar, Gatorade Zero and rapid hydration variants are performing well, and strategic partnerships like those with Celsius and Starbucks support portfolio diversification into energy and coffee categories. Furthermore, the company's acquisition of brands like Poppi (pending regulatory approval) underlines its effort to win in trending wellness spaces like prebiotic sodas. Innovation is also accelerating in protein-based products to cater to the growing GLP-1 consumer base, indicating that PepsiCo is not only responding to consumer behavior but proactively shaping it.

Globally, PepsiCo sees international markets as a long-term growth engine. The company is investing in infrastructure, talent and go-to-market capabilities in markets such as India, Brazil and parts of Europe. CEO Ramon Laguarta emphasized that the international business is now accretive to both revenues and profit, with strong mid- to high-single-digit growth expected in key regions. Combined with innovation-driven relevance in developed markets and execution excellence, such as enhanced data tools, operational improvements and cost discipline, PepsiCo is positioning itself for durable, balanced global growth across both developed and developing markets.

PEP’s Competitors: KO & MNST’s Smart Moves

The Coca-Cola Company KO and Monster Beverage MNST are the key beverage companies competing with PepsiCo in the global arena.

Coca-Cola, a leading beverage company, has been aggressively expanding its beverage portfolio beyond traditional sodas, investing in zero-sugar offerings, functional drinks and smart hydration products like Vitaminwater . It’s also leveraging digital tools and AI to optimize marketing and consumer engagement globally.

Monster Beverage has firmly positioned innovation as the centerpiece of its growth playbook, constantly refreshing and expanding its energy drink lineup across formats, flavors and regions. In 2024-25, the company unveiled everything from new Monster Ultra variants like Ultra Ultra Vice Guava and Ultra Blue Hawaiian  to Juice Monster flavors and the high-caffeine Java “Killer Brew” blends.

PEP’s Price Performance, Valuation & Estimates

Shares of PepsiCo have lost 15.3% year to date against the industry’s growth of 5.2%.

From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 15.99X, significantly below the industry’s average of 18.23X.

The Zacks Consensus Estimate for PEP’s 2025 earnings implies a year-over-year decline of 3.6%, whereas its 2026 earnings estimate suggests a year-over-year uptick of 5.4%. The estimates for 2025 and 2026 have been unchanged in the past 30 days.

PEP stock currently carries a Zacks Rank #4 (Sell).

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