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Can Coca-Cola Benefit From Rising Demand for Functional Drinks?
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Key Takeaways
Coca-Cola expands its functional drinks portfolio to tap rising demand for nutrition, hydration and wellness.
KO's fairlife delivered double-digit growth in Q3'26, while Powerade and smartwater registered volume gains.
KO's BODYARMOR FIT launch and improved fairlife capacity support growth despite costs and spending pressures.
The Coca-Cola Company (KO - Free Report) is strengthening its presence in functional beverages as consumers increasingly seek drinks offering nutrition, hydration and wellness benefits. The company's diversified portfolio, spanning protein-rich dairy beverages, sports hydration and enhanced water, provides opportunities to capture evolving consumption preferences. Continued innovation and investments in production capabilities are helping Coca-Cola expand its reach beyond traditional carbonated beverages.
Fairlife remains a key growth driver, delivering double-digit growth across its portfolio, including fairlife Nutrition Plan and Core Power, in third-quarter 2026. Improved production capacity at its Webster facility is helping address supply constraints and meet growing demand. The return of vanilla-flavored Nutrition Plan and plans to introduce a banana variant in 2027 further strengthen its innovation pipeline. Meanwhile, Powerade and smartwater recorded volume growth in North America, reflecting encouraging momentum across hydration-focused offerings.
Coca-Cola is also expanding its functional beverage portfolio through BODYARMOR FIT, a sparkling, zero-sugar sports hydration offering featuring caffeine, electrolytes and metabolism support. This innovation broadens consumption opportunities beyond workouts, while premium offerings such as Core Power and smartwater help the company address consumers seeking differentiated benefits and convenience.
Looking ahead, Coca-Cola's established distribution network, improving manufacturing capacity and continued product innovation could support growth in functional beverages. However, persistent cost pressures, cautious consumer spending and execution challenges across certain brands remain concerns. Sustaining momentum will depend on expanding product availability, maintaining affordability and converting evolving wellness preferences into repeat purchases.
Are PEP & MNST Also Expanding Their Functional Drink Portfolios?
PepsiCo Inc. (PEP - Free Report) and Monster Beverage Corporation (MNST - Free Report) are also strengthening their functional beverage portfolios through product innovation and investments to capitalize on growing consumer demand for healthier, performance-oriented drinks.
PepsiCo is expanding its functional beverage portfolio to capitalize on the growing demand for hydration, energy and wellness-focused drinks. In third-quarter 2026, Gatorade delivered volume and revenue growth, supported by Gatorlyte and Gatorade Lower Sugar, which gained market share. Propel also registered growth, while poppi improved its performance. The Celsius partnership strengthened PepsiCo's energy presence, positioning the company to capture emerging consumption opportunities despite persistent North American challenges.
Monster Beverage is capitalizing on rising functional beverage demand through its expanding energy drink portfolio. In third-quarter 2026, net sales increased 16.7%, supported by innovation and international expansion. Its zero-sugar Ultra brand recorded 19% U.S. dollar sales growth, reflecting strong consumer demand. The planned March 2027 launch of Monster Protein in chocolate and vanilla flavors could further strengthen its presence in functional beverages and support growth.
Zacks Rundown for Coca-Cola
KO shares have rallied 34.1% in the past year compared with the industry’s 22.1% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 27.37X, higher than the industry’s 20.4X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KO’s 2026 and 2027 earnings implies year-over-year growth of 11% and 6.2%, respectively. Earnings estimates for 2026 have moved up 1.2% in the past 30 days, while the same for 2027 has been unchanged in the past 30 days.
View the Zacks #1 Rank List
Image: Bigstock
Can Coca-Cola Benefit From Rising Demand for Functional Drinks?
Key Takeaways
The Coca-Cola Company (KO - Free Report) is strengthening its presence in functional beverages as consumers increasingly seek drinks offering nutrition, hydration and wellness benefits. The company's diversified portfolio, spanning protein-rich dairy beverages, sports hydration and enhanced water, provides opportunities to capture evolving consumption preferences. Continued innovation and investments in production capabilities are helping Coca-Cola expand its reach beyond traditional carbonated beverages.
Fairlife remains a key growth driver, delivering double-digit growth across its portfolio, including fairlife Nutrition Plan and Core Power, in third-quarter 2026. Improved production capacity at its Webster facility is helping address supply constraints and meet growing demand. The return of vanilla-flavored Nutrition Plan and plans to introduce a banana variant in 2027 further strengthen its innovation pipeline. Meanwhile, Powerade and smartwater recorded volume growth in North America, reflecting encouraging momentum across hydration-focused offerings.
Coca-Cola is also expanding its functional beverage portfolio through BODYARMOR FIT, a sparkling, zero-sugar sports hydration offering featuring caffeine, electrolytes and metabolism support. This innovation broadens consumption opportunities beyond workouts, while premium offerings such as Core Power and smartwater help the company address consumers seeking differentiated benefits and convenience.
Looking ahead, Coca-Cola's established distribution network, improving manufacturing capacity and continued product innovation could support growth in functional beverages. However, persistent cost pressures, cautious consumer spending and execution challenges across certain brands remain concerns. Sustaining momentum will depend on expanding product availability, maintaining affordability and converting evolving wellness preferences into repeat purchases.
Are PEP & MNST Also Expanding Their Functional Drink Portfolios?
PepsiCo Inc. (PEP - Free Report) and Monster Beverage Corporation (MNST - Free Report) are also strengthening their functional beverage portfolios through product innovation and investments to capitalize on growing consumer demand for healthier, performance-oriented drinks.
PepsiCo is expanding its functional beverage portfolio to capitalize on the growing demand for hydration, energy and wellness-focused drinks. In third-quarter 2026, Gatorade delivered volume and revenue growth, supported by Gatorlyte and Gatorade Lower Sugar, which gained market share. Propel also registered growth, while poppi improved its performance. The Celsius partnership strengthened PepsiCo's energy presence, positioning the company to capture emerging consumption opportunities despite persistent North American challenges.
Monster Beverage is capitalizing on rising functional beverage demand through its expanding energy drink portfolio. In third-quarter 2026, net sales increased 16.7%, supported by innovation and international expansion. Its zero-sugar Ultra brand recorded 19% U.S. dollar sales growth, reflecting strong consumer demand. The planned March 2027 launch of Monster Protein in chocolate and vanilla flavors could further strengthen its presence in functional beverages and support growth.
Zacks Rundown for Coca-Cola
KO shares have rallied 34.1% in the past year compared with the industry’s 22.1% growth.
Image Source: Zacks Investment Research
From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 27.37X, higher than the industry’s 20.4X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for KO’s 2026 and 2027 earnings implies year-over-year growth of 11% and 6.2%, respectively. Earnings estimates for 2026 have moved up 1.2% in the past 30 days, while the same for 2027 has been unchanged in the past 30 days.
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.