Coca-Cola’s growth potential - summary
- Coca‑Cola delivered strong 2025 profits but faced strategic turbulence
- Costa Coffee underperformed and complicated Coca‑Cola’s long‑term growth plans
- Coca‑Cola’s evolving portfolio strategy strengthened retail execution and category influence
- Rising wellness trends offer opportunities requiring sharper innovation and partnerships
- Functional beverages and hot drinks pose strategic challenges demanding focused decisions
It’s been a turbulent year for The Coca‑Cola Company.
The beverage giant delivered solid profitability, posting a net income of $13bn (€11.2bn) for the twelve months ending 30 September 2025 (MacroTrends). That’s a 25% increase on 2024, highlighting the brand’s robust profit momentum as it heads into 2026.
But this success was tempered by strategic missteps, as it failed to grow its service sector venture, Costa Coffee.
Coca-Cola completed the £3.9bn purchase of British coffee chain Costa Coffee back in January 2019. But cracks soon began to show, with Coca-Cola chief executive James Quincey saying Costa had “not quite delivered” and it was “not where we wanted it to be from an investment hypothesis point of view”.
Analysts however have been more critical of the multinational, with Nandini Roy Choudhury, principal consultant for food and beverage at analytics group Future Market Insights, saying “Coca-Cola underestimated how capital-intensive and operationally demanding the café business is, compared to Coca-Cola’s traditional concentrate and bottling model.”
Now, efforts to offload the Costa have also apparently failed, with rumours the sale has been scrapped rife throughout the industry.
Yet, despite the turbulence of the past year, the company is proving it has what it takes to achieve significant growth in 2026.
The secret to Coca-Cola’s success
If you want to understand why Coca‑Cola keeps winning, at least in the retail sector, look no further than its evolving playbook. The company isn’t just reacting to change, it’s actively reshaping its future.
“Coca-Cola’s adaptation strategy is increasingly portfolio-led rather than brand-led,” says Future Market Insights’ Choudhury.
Compared with peers like PepsiCo, which has leaned heavily into functional nutrition and snacks, Coca-Cola has focused on broadening choice within beverages – spanning low- and no-sugar variants (Coca-Cola Zero Sugar), hydration (Smartwater), ready-to-drink tea (Fuze Tea), sports drinks (Powerade), and premium mixers (Schweppes).
“Its approach prioritises reformulation, portion control, and selective premiumisation rather than radical reinvention,” says Choudhury. “This has allowed Coca-Cola to protect core brand equity while gradually aligning with health, moderation, and lifestyle-driven consumption.”
The all-American brand’s success is also rooted in its ability to execute with extreme discipline at the point of sale.
Retail buyers consistently praise the company’s category management capabilities, from precision demand forecasting to its unmatched merchandising engine.
Whether it’s tailoring pack formats for convenience channels, optimising shelf sets for supermarkets, or leveraging data-led insights to anticipate seasonal shifts, Coca‑Cola’s retail partnerships are designed to grow the entire soft drinks category rather than simply chase share.
This collaborative, market‑shaping approach has strengthened its influence with retailers while ensuring that innovation, however incremental, lands with maximum commercial impact.
Growth potential
Looking ahead, Coca‑Cola has significant room to accelerate growth by leaning into the very trends reshaping the beverage landscape.
Rising demand for low‑sugar formulations, cleaner labels, and “everyday premium” offerings continues to create headroom for brands like Smartwater and Schweppes.
But some of the strongest future opportunities lie in the fast‑growing functional beverage space – from gut‑health drinks to adaptogenic blends and protein‑fortified formats, where specialist innovators such as Yakult, Vita Coco, and Celsius currently set the pace.
With its unmatched scale, distribution, and marketing infrastructure, Coca‑Cola is well positioned to expand into these function‑first categories, provided it pairs its existing strengths with sharper, more targeted innovation.
Beyond product innovation, Coca‑Cola also has opportunities to drive growth by deepening its cultural relevance.
And while consumers aren’t explicitly looking for “tech beverages”, they are increasingly drawn to digital‑first storytelling, limited‑edition releases, and experiences that feel participatory and shareable, explains Future Market Insights’ Choudhury.
Challenger brands have excelled here, blurring the lines between beverage, culture, and community. Coca‑Cola has made strides through collaborations, music and gaming tie‑ins, and digital‑led campaigns, but the bigger opportunity lies in scaling these cultural touchpoints into a consistent growth engine.
Coca‑Cola’s growth gaps
But even with its strong retail execution and broadening portfolio, Coca‑Cola still faces some structural challenges that could shape its next phase of growth.
“Traditional full-sugar carbonated soft drinks face long-term volume pressure in many developed markets,” says Future Market Insights’ Choudhury.
And while Coca‑Cola Zero Sugar has helped cushion the blow, most of that growth is substitution rather than true expansion. At the same time, the boom in high‑function wellness drinks – from probiotics to plant‑based nutrition – is being defined by specialist brands, leaving Coca‑Cola without the same authority or credibility in these fast‑moving segments.
Without sharper innovation, strategic partnerships or targeted acquisitions, the company risks being outpaced in the very categories driving the next wave of beverage growth.
These strategic uncertainties extend to Coca‑Cola’s position in hot beverages. If the Costa sale fails to progress, the company could once again find itself questioning the role of capital‑heavy, retail‑led formats in its long‑term growth strategy. Costa offered diversification beyond cold drinks, but it also brought operational complexity that sits uncomfortably alongside Coca‑Cola’s typically asset‑light model. A stalled or abandoned transaction may ultimately push the business to double down on scalable, lower‑risk opportunities – particularly ready‑to‑drink coffee and partnership‑driven beverage platforms — rather than owning and operating physical retail footprints.
Coca‑Cola’s next chapter
As Coca‑Cola heads into 2026, the company moves forward from a year of recalibration with a clearer view of both its opportunities and its constraints. The difficulties surrounding Costa and the shifting dynamics in wellness‑led categories have highlighted areas requiring more focused execution, while strong retail performance and portfolio breadth continue to underpin its resilience.
From 31 March 2026, Henrique Braun will take over as CEO, bringing nearly three decades of operational and international experience to the role, as James Quincey transitions to executive chairman. Braun has indicated he will concentrate on identifying global growth opportunities, strengthening consumer engagement and accelerating the company’s digital transformation efforts, priorities echoed by Coca‑Cola’s board and leadership team.
With a refreshed leadership structure, ongoing investment in digital capabilities and a continued shift toward higher‑value beverage segments, Coca‑Cola enters the new year with a stable platform.
The months ahead will test how effectively the company can balance innovation with discipline, and how Braun’s appointment shapes its approach to growth in a changing global beverage landscape.
