Is PepsiCo's Growth Story Becoming More Internationally Focused?

PEP's international business is nearing $40 billion in revenues as overseas volumes, share gains and investment reshape its long-term growth mix.

Mahak Lohia

3 min read

PepsiCo, Inc. PEP is increasingly leaning on its international operations as a key engine of growth, adding greater geographic balance to a business historically anchored by North America. The company’s overseas operations have gained considerable scale after several years of sustained investment, with international beverage volumes now accounting for roughly two-thirds of companywide volumes and international foods representing more than half. PepsiCo expects the international business to cross $40 billion in revenues this year while describing it as profit accretive and an increasingly important source of long-term diversification.

The strength is also broad-based geographically. PepsiCo noted resilient trends across markets, including Vietnam, Thailand, China and the Middle East, despite pressure from elevated fuel costs. Europe has remained healthy, supported in part by World Cup-related activation, while Latin America continues to trend positively despite growing somewhat slower than other international markets. Category expansion and market-share gains, particularly in beverages, are supporting the momentum, while PepsiCo’s global procurement capabilities and operating agility are helping the company navigate inflation and raw-material availability across markets.

More importantly, the international shift appears structural rather than temporary. PepsiCo sees significant runway from lower per-capita consumption and market-share opportunities across many overseas markets and expects international operations to remain a major growth driver in the coming years. The company is also intent on maintaining capital, marketing and talent investments internationally even as it works to revive North American growth. PepsiCo believes international markets could become its biggest source of growth over the next five to 10 years, reinforcing the view that the company’s growth profile is becoming increasingly global.

International Growth Trends at KDP and Coca-Cola

Keurig Dr Pepper Inc. KDP and The Coca-Cola Company KO are benefiting from stronger overseas momentum, highlighting the growing importance of international markets to their broader growth strategies.

Keurig is seeing its international business become a more meaningful contributor to growth, supported by improving momentum across Mexico and Canada. KDP International’s second-quarter 2026 net sales increased 12.4% on a constant-currency basis, reflecting a balanced contribution from higher volumes and pricing. Mexico returned to volume growth as the impact of the beverage tax moderated, while brands such as Peñafiel, Ades and Twist benefited from distribution expansion and stronger execution. Canada also delivered broad-based growth across carbonated soft drinks, alcohol alternatives, energy and ready-to-drink tea. The addition of JDE Peet’s further broadens KDP’s geographic exposure, although its U.S. beverage operations remain an important growth driver.

Coca-Cola continues to demonstrate the advantages of its broad international footprint, with overseas markets playing an important role in driving systemwide volume growth. In the second quarter of 2026, unit case volume advanced across Europe, the Middle East and Africa, Latin America and Asia Pacific, with Asia Pacific delivering particularly strong growth. India, China and Brazil were among the markets contributing to Coca-Cola’s global volume expansion, while Trademark Coca-Cola posted growth across all geographic operating segments. Continued momentum across emerging and developed markets, alongside strength in categories such as sparkling beverages, water and sports drinks, underscores how Coca-Cola’s diversified international presence remains central to its overall growth profile.

PEP’s Price Performance, Valuation & Estimates

Shares of PepsiCo have lost 4.7% in the past three months against the industry’s rise of 5.7%.

Image Source: Zacks Investment Research

From a valuation standpoint, PEP trades at a forward price-to-earnings ratio of 16.22X, below the industry’s average of 20.05X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for PEP’s 2026 and 2027 earnings implies year-over-year growth of 5.3% and 4.9%, respectively. The company’s EPS estimates for 2026 and 2027 have moved southward in the past 30 days.

Image Source: Zacks Investment Research

PEP stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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