Recasting Our Point of Reference
February 28, 2026
By Brian Sudano
The beverage marketplace has gone through repeated cycles of fragmentation, reinvention, and rediscovery. Not long ago, the narrative was that big brands were finished and the future belonged to endless niche innovation.
That belief drove large companies to build incubators like Coke’s VEB and Pepsi’s Hive, mirroring similar moves in spirits. Trade press declared iconic brands in decline: Coca‑Cola was supposedly losing relevance, Gatorade had “lost its way,” and Tropicana was in a “death spiral.” Categories like CSDs were labeled dead, diet sodas were written off due to sweetener concerns, and juice was dismissed as empty calories.
Yet the outcomes tell a different story:
- Coca‑Cola is back in sustained growth.
- Gatorade remains dominant and more profitable than ever.
- Juice has stabilized with growth ahead.
- VEB and Hive have been shut down.
- Large‑company incubators have been scaled back.
The shift reflects a recognition that big‑company systems are built for scale, not for nurturing dozens of under‑scaled brands. Coke and Pepsi have moved toward acquiring or partnering with brands that already have traction. KDP evolved from attracting proof‑of‑concept brands to acquiring scaled players like Ghost. This model fuels even more entrepreneurial activity, as founders build with the hope of being acquired.
We’ve seen this cycle before. In the 1990s, the race for premium juice led to acquisitions of Naked, Odwalla, Bolthouse, and others followed by slowing growth, cost rationalization, and exits. That disappointment made companies hesitant in energy, even as Monster and Red Bull surged. Had energy been viewed as part of the broader CSD ecosystem, its long‑term potential might have been clearer. Today, health‑oriented CSDs like Poppi are increasingly seen as simply flavored CSDs. When viewed holistically, including energy and functional CSDs, the category has been stable for a decade, shifting within segments but not declining overall.
Beer companies are now experimenting with incubators too, but the same challenge remains: managing low‑volume brands inside scale‑driven systems, especially with margin pressure.
Key Takeaways
- Category‑leading brands in decline are not destined to die. They require evolution until consumer values, behaviors, and brand equities realign.
- Categories should be viewed broadly, not as isolated segments. Cross‑over need states reveal more opportunity than siloed analysis.
- Large companies must be realistic about their innovation capabilities. Historically, small companies outperform in early‑stage development until scale becomes an advantage.