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Can Coca-Cola Sustain Growth in Its Sparkling Soft Drink Business?
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Key Takeaways
Coca-Cola's Trademark brand posted 5% volume growth in Q2'26, its strongest increase in 17 years.
KO is using innovation, package sizes and price points to address affordability and premiumization.
Coca-Cola faces tougher second-half comparisons, with two-year volume growth running at about 2%.
The Coca-Cola Company’s (KO - Free Report) sparkling soft drink business continues to benefit from strong brand equity, targeted innovation and broad-based consumer engagement. In the second quarter of 2026, Trademark Coca-Cola delivered 5% year-over-year volume growth, marking its strongest quarterly increase in 17 years, excluding the COVID recovery period.
Management attributed part of this momentum to the FIFA World Cup activation, which helped deepen consumer engagement across markets. Sprite also gained momentum in Asia and the Middle East, while Coca-Cola continued expanding Coca-Cola Zero Zero into additional markets after encouraging results in Europe.
Innovation and revenue growth management are also supporting the category. In North America, Coca-Cola reported strong volume growth across several brands, including Trademark Coca-Cola and FRESCA, while the relaunched Mr. Pibb posted volume growth of more than 20%. The company is using different package sizes and price points to address both affordability and premiumization, including mini cans in retail and convenience channels. Management believes these initiatives are helping keep brands relevant as lower-income consumers remain pressured and increasingly focus on value.
Sustaining this momentum, however, will require Coca-Cola to navigate tougher comparisons and an uneven consumer backdrop. Management noted that second-half comparisons will become more difficult and cautioned against extrapolating one quarter’s strong volume performance, with two-year volume growth running at about 2%. Still, continued innovation, disciplined revenue growth management and investment behind consumer engagement provide important levers for supporting durable sparkling beverage growth.
How Are Sparkling Soft Drinks Supporting PEP & KDP Growth?
PepsiCo, Inc. (PEP - Free Report) and Keurig Dr Pepper Inc. (KDP - Free Report) are also leaning on their sparkling soft drink portfolios, supported by brand strength, innovation and evolving consumer preferences, to sustain beverage growth.
PepsiCo’s sparkling soft drink business is benefiting from strength in zero-sugar and flavored offerings. In second-quarter 2026, Pepsi Zero Sugar, Pepsi Wild Cherry & Cream, Mountain Dew Zero Sugar and Mug Root Beer each gained both value and volume share. Still, sustaining growth may prove challenging as North America beverage organic volume declined 4%, highlighting broader category softness and consumer pressure.
Keurig Dr Pepper’s sparkling soft drink business remains a key growth driver, supported by strong brand momentum and innovation. In the second quarter of 2026, Dr Pepper Zero Sugar retail sales jumped nearly 30%, while Canada Dry posted double-digit retail sales growth. Bloom Pop also gained share in prebiotic CSDs. However, tougher comparisons could moderate growth in the second half despite continued portfolio strength.
Zacks Rundown for Coca-Cola
KO shares have rallied 26% in the year-to-date period compared with the industry’s 14% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 25.44X, higher than the industry’s 19.2X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KO’s 2026 and 2027 earnings implies year-over-year growth of 9.7% and 7.1%, respectively. Earnings estimates for 2026 have been unchanged in the past 30 days, while the EPS estimate for 2027 moved up by a penny in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Coca-Cola Sustain Growth in Its Sparkling Soft Drink Business?
Key Takeaways
The Coca-Cola Company’s (KO - Free Report) sparkling soft drink business continues to benefit from strong brand equity, targeted innovation and broad-based consumer engagement. In the second quarter of 2026, Trademark Coca-Cola delivered 5% year-over-year volume growth, marking its strongest quarterly increase in 17 years, excluding the COVID recovery period.
Management attributed part of this momentum to the FIFA World Cup activation, which helped deepen consumer engagement across markets. Sprite also gained momentum in Asia and the Middle East, while Coca-Cola continued expanding Coca-Cola Zero Zero into additional markets after encouraging results in Europe.
Innovation and revenue growth management are also supporting the category. In North America, Coca-Cola reported strong volume growth across several brands, including Trademark Coca-Cola and FRESCA, while the relaunched Mr. Pibb posted volume growth of more than 20%. The company is using different package sizes and price points to address both affordability and premiumization, including mini cans in retail and convenience channels. Management believes these initiatives are helping keep brands relevant as lower-income consumers remain pressured and increasingly focus on value.
Sustaining this momentum, however, will require Coca-Cola to navigate tougher comparisons and an uneven consumer backdrop. Management noted that second-half comparisons will become more difficult and cautioned against extrapolating one quarter’s strong volume performance, with two-year volume growth running at about 2%. Still, continued innovation, disciplined revenue growth management and investment behind consumer engagement provide important levers for supporting durable sparkling beverage growth.
How Are Sparkling Soft Drinks Supporting PEP & KDP Growth?
PepsiCo, Inc. (PEP - Free Report) and Keurig Dr Pepper Inc. (KDP - Free Report) are also leaning on their sparkling soft drink portfolios, supported by brand strength, innovation and evolving consumer preferences, to sustain beverage growth.
PepsiCo’s sparkling soft drink business is benefiting from strength in zero-sugar and flavored offerings. In second-quarter 2026, Pepsi Zero Sugar, Pepsi Wild Cherry & Cream, Mountain Dew Zero Sugar and Mug Root Beer each gained both value and volume share. Still, sustaining growth may prove challenging as North America beverage organic volume declined 4%, highlighting broader category softness and consumer pressure.
Keurig Dr Pepper’s sparkling soft drink business remains a key growth driver, supported by strong brand momentum and innovation. In the second quarter of 2026, Dr Pepper Zero Sugar retail sales jumped nearly 30%, while Canada Dry posted double-digit retail sales growth. Bloom Pop also gained share in prebiotic CSDs. However, tougher comparisons could moderate growth in the second half despite continued portfolio strength.
Zacks Rundown for Coca-Cola
KO shares have rallied 26% in the year-to-date period compared with the industry’s 14% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 25.44X, higher than the industry’s 19.2X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KO’s 2026 and 2027 earnings implies year-over-year growth of 9.7% and 7.1%, respectively. Earnings estimates for 2026 have been unchanged in the past 30 days, while the EPS estimate for 2027 moved up by a penny in the past 30 days.
Image Source: Zacks Investment Research
Coca-Cola currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.