Zero-Sugar Drinks Lift PepsiCo Sales to a Record Share
PepsiCo's zero and low-sugar drinks reached 88% of volume in the quarter, while Coca-Cola and Varun Beverages also report strong growth in diet lines.
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what happened
According to Moody's, zero and low-sugar drinks made up a record 88% of PepsiCo's total volumes in the July-September 2026 quarter, up from 44% a year earlier. Shoppers are steadily moving away from sugary drinks, which helps offset the steep and ongoing rise in sugar prices.
Larger rival Coca-Cola also reported that sales of its diet and light drinks doubled year on year. PepsiCo's bottler Varun Beverages told investors on its earnings call that a bigger mix of low- and no-sugar products helped it keep gross margins in India, despite inflationary raw material costs linked to the West Asia crisis.
Two senior bottling executives said diet and light drinks now account for over 60% of Coca-Cola's volume sales, up from a five-year high of 30% last year.
why it matters
For investors, lower sugar consumption cushions the blow from expensive raw materials and supports margins across beverage makers. The shift toward no-sugar products is also changing the demand mix across the category.
market impact
PepsiCo and Coca-Cola shares: the shift to no-sugar drinks supports margins amid costly sugar
- PepsiCo shares pressure up — a rising share of no-sugar drinks offsets higher sugar prices
tags
instruments
sources
- Zero-Sugar Drinks Taste Sweet Success — Moody's, 3 November 2026 at 04:12 UTC
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