Fairlife Expansion Gives Coca-Cola a Protein-Powered Edge

Fairlife has emerged as one of The Coca-Cola Company’s KO most powerful growth engines, giving the beverage giant a strong foothold in the fast-expanding protein and functional nutrition space. As consumer preferences shift toward healthier, high-protein options, driven by fitness trends, weight-management drugs and demand for better-for-you beverages, Fairlife’s premium positioning and strong brand loyalty have set it apart from traditional dairy and beverage offerings. This evolution marks a strategic pivot for Coca-Cola, extending its reach well beyond carbonated drinks into higher-margin, nutrition-led categories.

Coca-Cola’s ongoing investment in expanding Fairlife’s production capacity is central to unlocking the brand’s next phase of growth. Capacity constraints have historically limited Fairlife’s ability to fully meet demand, but new facilities and scale efficiencies are expected to ease supply pressures and support stronger volume growth over the medium term. This expansion not only improves availability but also enhances Coca-Cola’s ability to innovate within protein shakes and value-added dairy, reinforcing Fairlife and Core Power as category leaders in an increasingly competitive market.

Fairlife gives Coca-Cola a differentiated edge at a time when consumer staples companies are racing to align portfolios with health and wellness trends. Protein drinks offer attractive pricing power, strong repeat purchase behavior and resilience against shifting consumption patterns. As capacity comes online and distribution broadens, Fairlife strengthens Coca-Cola’s growth profile, helping balance slower-growing legacy categories and positioning the company to capture long-term demand in functional beverages.

PEP vs. KDP: Protein Beverage Play

In a fiercely competitive beverage market, PepsiCo Inc. PEP and Keurig Dr Pepper Inc. KDP are carving distinct paths into the fast-growing protein and functional nutrition space, leveraging their portfolios and distribution strengths to stay relevant as consumer preferences shift toward health-focused beverages.

PepsiCo is sharpening its presence in the protein and functional beverage space by leaning on its broad portfolio and innovation muscle rather than a single breakout brand. Through offerings such as Muscle Milk, Evolve, and protein-enhanced extensions within its Gatorade and Quaker ecosystems, PepsiCo is tapping into consumer demand for performance nutrition and everyday protein intake. The company’s scale in distribution and its ability to bundle protein with hydration, energy and snacking occasions give it a holistic edge, allowing PepsiCo to position protein as part of a lifestyle platform rather than a standalone trend.

Keurig Dr Pepper’s approach to protein is more measured but increasingly strategic, focusing on selective partnerships and brand adjacency rather than heavy capital investment. KDP has leaned into functional and better-for-you beverages such as Core Hydration and enhanced ready-to-drink platforms while exploring opportunities to layer in nutrition-led innovation over time. Its strength in at-home consumption and single-serve systems offers a unique pathway to functional expansion, positioning KDP to participate in protein and wellness trends with lower risk and strong optionality as the category continues to evolve.

The Zacks Rundown for Coca-Cola

KO’s shares have risen 12.1% in the past three months compared with the industry’s growth of 14.2%.

Image Source: Zacks Investment Research

From a valuation standpoint, Coca-Cola is trading at a forward price-to-earnings ratio of 24.27X, higher than the industry’s 20.16X.
 

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for KO’s 2025 and 2026 earnings implies year-over-year growth of 3.8% and 8.1%, respectively. Earnings estimates for 2025 and 2026 have been unchanged in the past seven 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.

Zacks Names #1 Semiconductor Stock

This under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.

With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com