Part of a series on the enduring global brands we own.
Over the past 50 years, Coca-Cola has innovated and adapted its portfolio as consumer preferences have changed. When consumers became more concerned about sugar, it introduced Diet Coke and later Coca-Cola Zero Sugar. When large bottles became less profitable per litre, it shifted toward smaller cans with higher revenue per litre. And when it identified an opportunity to sell cola at dinner, it created a product tailored to that occasion.
In 2025, Coca-Cola sold roughly the same volume of liquid as in the prior year but grew revenue by 5%. Almost all of that growth came from pricing and a shift toward smaller, higher value packs.
We believe Coca-Cola’s competitive advantage lies in its ability to understand consumer behaviour, interpret data and trends, and adapt its portfolio accordingly. This note examines where that advantage came from, what it has been worth, and the key assumption behind the model: Coca-Cola must continue to read the consumer correctly.
What is in the can
From the 1960s through the 1980s, cola accounted for around 60% of all soft-drink sales. However, diet colas were growing around three times faster than the overall category. Consumer preferences were shifting, and Coca-Cola responded.
Its first diet product was Tab, launched in 1963. Tab was a sugar-free cola sold under a separate brand rather than under the Coca-Cola name. It performed respectably for two decades, but never became a major brand. Coca-Cola’s research suggested that Tab’s limitation was not the product itself, but the lack of the Coca-Cola name—a brand consumers already trusted.
That insight led to the launch of Diet Coke in 1982. Rather than replacing the original Coca-Cola, Diet Coke was sold alongside it. It was also the first product in 96 years to carry the Coca-Cola name. Within 18 months, it had become the best-selling soft drink of any kind among American women, particularly baby boomers. The lesson was not simply about sweetener: consumers were willing to buy a diet drink if it came from a brand they knew and trusted.
Three years later, Coca-Cola drew the opposite lesson from New Coke. Unlike Diet Coke, New Coke replaced the original formula rather than complementing it. Coca-Cola Classic returned to shelves 79 days later. The distinction mattered: adding a product to the portfolio worked; taking away a familiar product did not.
Coca-Cola has not always made the right call. Diet Coke gradually developed an image problem, particularly among male consumers, and its volumes declined for eight consecutive years into the mid-2010s. Coca-Cola’s response was not to reposition Diet Coke, but to launch Coca-Cola Zero Sugar as a distinct third brand, with black packaging and a more gender-neutral positioning. As one industry observer put it, Zero Sugar meant men were “not feeling as embarrassed to say Diet at the bar.” Zero Sugar volume grew 14% in 2025 and 16% in the second quarter of 2026, while Diet Coke grew 7%.
Product reformulation can also create new drinking occasions. In some European markets, around 60% of adult consumers monitor their caffeine intake at night. Coca-Cola responded by relaunching Coca-Cola Zero Zero: a cola with no sugar, calories or caffeine, positioned for the evening meal. At dinner, its competition is not necessarily Pepsi; it is wine, water, or no drink at all.
The size of the can
The clearest example of Coca-Cola’s consumer understanding may not be a new drink at all. It may be the size of the can.
In 2015, Coca-Cola began promoting its 7.5oz mini can alongside the standard 12oz format. A consumer switching to the mini can receives 37% less liquid while paying more per litre. On a purely unit economic basis, it is a worse deal. Yet consumers continue to buy it. Mini cans are now a business worth roughly $1 billion.
Coca-Cola understood something important before many competitors: consumers do not typically evaluate a drink based on its price per litre. They assess the absolute price displayed on the shelf. A smaller can therefore feel affordable because its ticket price is lower, even if its unit price is higher.
This was another example of Coca-Cola reading consumer behaviour accurately. With Diet Coke, it understood what consumers wanted to drink. With mini cans, it understood how consumers decide what is worth paying for.
That insight is reflected in reported economics. Coca-Cola sells concentrate, but Coca-Cola Europacific Partners—its largest bottler—reported revenue per unit case growth of 2.9% in 2025, driven in part by growth in cans as large PET bottles declined. Coca-Cola is increasingly paid not for the number of litres it sells, but for the number of occasions on which someone opens a can.
There is a second, less obvious payoff. Coca-Cola reported that close to 70% of what it sells contains fewer than 100 calories per 12oz serving, while only around 30% is low or no sugar. Much of the gap between those two figures is the can rather than the recipe. A 12oz can of Coca-Cola Original Taste contains 140 calories, so the same drink in a 7.5oz mini can contains about 90. Shrinking the pack delivers part of the calorie reduction without reformulating anything. The pricing strategy and the health strategy are the same strategy.
The GLP-1 question
The next consumer shift may be driven less by sugar than by appetite. We raised this question with Coca-Cola management in June.
Management’s view is that GLP-1 drug use will continue to grow, particularly in developed markets, but that the impact on Coca-Cola should be limited by the breadth of its portfolio. Consumers using these drugs may drink less full-sugar cola, but they may also consume more diet, low-calorie and protein drinks. In that case, consumption moves within Coca-Cola’s portfolio rather than away from it.
A consumer switching from Coca-Cola Original Taste to Coca-Cola Zero Sugar is broadly revenue-neutral. More broadly, three-quarters of Coca-Cola’s billion-dollar brands now sit outside core sparkling beverages. Its Core Power protein-drink brand, for example, grew from approximately $10 million in retail sales in 2014 to around $4 billion in 2024. Meanwhile, much of the company’s volume growth is coming from emerging markets, where GLP-1 drugs remain far less accessible.
External evidence offers some support. GLP-1 drugs may reduce overall consumption, but they also appear to make consumers more selective about quality. In US postcodes with the highest adoption rates, quick-service restaurants have lost wallet share while full-service dining has gained it. The businesses most exposed are those that rely on selling large volumes cheaply—precisely the model Coca-Cola has spent the past decade moving away from.
What could go right
Coca-Cola remains far from saturating its addressable market. Only around six out of every 100 global shopping baskets contain one of its drinks. There is also substantial runway in sugar-free products: these account for roughly half of Coca-Cola’s sales in Western Europe, but less than one-third globally. The transition that is well advanced in developed markets may therefore have many years left to run in faster-growing regions.
The company is also improving execution. Around two-thirds of the 33 million shops, bars and restaurants stocking Coca-Cola products now order digitally. Early trials suggest that digital ordering can lift sales by a few percentage points.
What could go wrong
The principal risk is not simply declining volume. Coca-Cola’s volumes have historically grown at around 2% per year for decades, and they rose 3% in the first quarter of 2026 and 5% in the second quarter.
The greater challenge is geographic mismatch. Most volume growth is coming from India, China and Africa, while growth in revenue per drink is concentrated in developed markets. In Asia Pacific, second-quarter volume rose 8%, but revenue per drink fell 9%. The reason was mix: much of the growth came from lower-priced, affordable packs. In India, Coca-Cola also lost ground to cheaper competitors.
This matters because Coca-Cola’s premium-pack strategy works best in richer markets. In lower-income markets, the strategy often runs in reverse: smaller packs are used to preserve affordability rather than to increase price per litre.
The central question
Coca-Cola is no longer paid simply for the litres it sells. It is paid for what it earns each time someone opens a can, and for a decade it has kept raising that number by reading the consumer before the rest of the category did. The next decade will put the same skill to a harder test. It has to continue to innovate and drive the model in emerging markets, where smaller packs are used to protect affordability rather than to raise price. It has to sell to consumers taking appetite-suppressing drugs, where the change is not what people want to drink but how much they want at all. Coca-Cola has adapted through every shift in what people were willing to drinks for well over a century. The next one will be no different in kind, only in what the change turns out to be. These challenges create opportunity.