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Can Coca-Cola Sustain Growth Amid Rising Beverage Competition?

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Key Takeaways

  • Coca-Cola reported $12.62B in Q2 revenues, up 2.5% year over year, with 5% organic revenue growth
  • Coca-Cola gained value share for the 17th straight quarter through brand innovation and affordability plays.
  • KO now guides for 5-6% organic revenue growth and about 8% EPS growth for full-year 2025.

The Coca-Cola Company (KO - Free Report) has shown resilience, proving that its “all-weather” strategy remains effective even in a tough global environment. In the second quarter of 2025, the company delivered $12.62 billion in revenues, up 2.5% year over year, and achieved 5% organic revenue growth despite volume softness in some regions. Its ability to balance global scale with local execution, through tailored marketing, innovative product launches and affordability initiatives, helped Coca-Cola extend its streak of 17 consecutive quarters of value share gains. This adaptability gives the company confidence in meeting its full-year growth targets.

Competition in beverages is heating up, with rivals expanding aggressively into categories like energy, coffee and functional drinks. Coca-Cola, however, is fighting back with a mix of brand strength and innovation. Coca-Cola Zero Sugar, Sprite, Fanta and fairlife dairy each delivered growth, while new offerings like Sprite + Tea and Coca-Cola with cane sugar are designed to capture shifting consumer preferences. At the same time, affordability plays, such as refillable in emerging markets and mini cans in developed regions, are helping Coca-Cola connect with both value-conscious and premium shoppers. These moves strengthen its positioning against both global players and nimble local competitors.

Looking ahead, sustaining growth will depend on Coca-Cola’s ability to keep investing in its brands, expand capacity in fast-growing areas like fairlife and execute locally amid volatility. The company acknowledges challenges, including weather disruptions in key markets like India and Mexico, as well as changing consumer habits in Asia. However, its system strength, marketing transformation and disciplined capital allocation provide a cushion. With updated guidance of 5-6% organic revenue growth and about 8% EPS growth for 2025, Coca-Cola is not only defending its leadership but also setting the stage for long-term success, even in a crowded and evolving beverage landscape.

KO’s Rivals: How PepsiCo & KDP Stack Up

In a fiercely competitive beverage market, PepsiCo Inc. (PEP - Free Report) and Keurig Dr Pepper Inc. (KDP - Free Report) stand out as Coca-Cola’s closest rivals, each leveraging unique strengths to challenge the industry leader. 

PepsiCo has built its strength by combining beverages with a powerful snacks portfolio, which gives it an edge in balancing performance across categories. While Coca-Cola leans heavily on drinks, PepsiCo benefits from brands like Lay’s, Doritos and Quaker, alongside Pepsi, Gatorade and Mountain Dew. This diversification helps the company capture consumer spending in both food and drinks, cushioning it against slowdowns in any one segment. PepsiCo is also leaning into healthier choices and functional offerings, expanding into zero-sugar beverages, energy drinks and convenient snacking to stay competitive with changing consumer tastes.

Keurig Dr Pepper, though smaller in scale, has carved out a strong position in North America by blending its coffee system with a growing lineup of sodas, flavored waters and energy drinks. Its strength lies in its portfolio balance, where brands like Dr Pepper, Snapple and Polar Seltzer complement its Keurig coffee machines. Recently, KDP has pushed harder into energy with C4 and accelerated efforts to revive coffee momentum, signaling its intent to compete more directly with both Coca-Cola and PepsiCo. While it lacks the same global reach, KDP’s focus on innovation and strong retail partnerships makes it an increasingly tough rival in the U.S. market.

The Zacks Rundown for Coca-Cola

KO’s shares have risen 5.5% year to date compared with the industry’s growth of 1.3%.

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From a valuation standpoint, Coca-Cola trades at a forward price-to-earnings ratio of 20.83X, significantly higher than the industry’s 17.41X.

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Image Source: Zacks Investment Research

The Zacks Consensus Estimate for KO’s 2025 and 2026 earnings implies year-over-year growth of 3.1% and 8.2%, respectively. Earnings estimates for 2025 and 2026 have been unchanged in the past seven days.

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Image Source: Zacks Investment Research

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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