The Coca-Cola Company (KO) showcased strong growth in its low and no-calorie beverage segment in the first quarter of 2025. Coca-Cola Zero Sugar led this trend, contributing significantly to the company’s overall shift toward healthier drink options across its 30-brand portfolio.
Currently, 30% of Coca-Cola’s total volume comes from low or no-calorie drinks, and 68% of its products contain less than 100 calories per 12-ounce serving. This change reflects a strategic response to increasing consumer demand for healthier and more functional beverages.
Among new launches, Coca-Cola introduced Simply Pop, its first prebiotic soda, in select U.S. markets. Another successful limited-time release, Coca-Cola Orange Cream, generated \$50 million in retail sales during the quarter. Additionally, the global tea brand Fuze continued to gain market share, especially with new products in Canada and Spain.
Coca-Cola is also investing heavily in marketing, with a digital-first return of the popular “Share a Coke” campaign. This effort targets Gen Z through personalized, tech-driven engagement. Using Studio X and connected packaging, the company adapts its campaigns to feel local in different markets, such as “Hecho en México” and “Everyday Tasty Celebrations.”
Despite challenges like fluctuating consumer sentiment and geopolitical issues, Coca-Cola’s portfolio strategy remains resilient. The company focuses on a mix of affordable and premium products, while prioritizing fewer but bolder innovations. Coca-Cola Zero Sugar stands out as a key growth driver, helping reshape the brand’s appeal for today’s health-conscious consumers. If this momentum continues, Coca-Cola’s health-focused shift could become one of its most profitable moves.
Coca-Cola faces strong competition from PepsiCo Inc. (PEP) and Keurig Dr Pepper Inc. (KDP) in the zero-sugar segment.
PepsiCo is also evolving its portfolio to meet consumer demand for health-conscious options. Pepsi Zero Sugar has gained ground thanks to wider shelf presence and targeted marketing toward younger, calorie-conscious consumers. PepsiCo’s “Positive Choices” strategy further expands into functional and wellness beverages with brands like Gatorade Fit, Lifewtr, and Propel. This broadening focus brings PepsiCo closer to Coca-Cola in key beverage categories, including sodas, energy drinks, hydration, and wellness products.
Keurig Dr Pepper is growing its zero-sugar and health-focused offerings with strong sales in Dr Pepper Zero Sugar and Diet Dr Pepper. It is also pushing better-for-you products like flavored waters, low-calorie teas, and functional drinks through brands such as Bai and Polar seltzers. While smaller globally, KDP competes with Coca-Cola in the U.S. carbonated and wellness drink markets. The company emphasizes innovation, premiumization, and cross-channel execution to strengthen its position.
Coca-Cola shares have risen 14.7% year to date, outperforming the industry average growth of 7.8%. The stock trades at a forward price-to-earnings ratio of 24, above the industry average of 21.24.
Earnings estimates for Coca-Cola suggest steady growth, with expected increases of 2.8% in 2025 and 8.2% in 2026. Estimates for 2026 have seen upward revisions recently.
Currently, Coca-Cola holds a Zacks Rank #2 (Buy), indicating a positive investment outlook.
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