Hot Picks: Coca-Cola, Monster and Constellation backed despite headwinds

Beverage companies are showing resilience despite tariffs and rising input costs, with demand trends and product innovation supporting growth.

BNN Bloomberg spoke with Filippo Falorni, director of U.S. beverages, household products and personal care at Citi, about why companies like Monster, Coca-Cola and Constellation Brands continue to see upside.

Key Takeaways

• Energy drinks continue to benefit from shifting consumer habits, including lower alcohol consumption among younger demographics.
• International markets remain a key growth driver, with significant room for share gains outside the U.S.
• Product innovation, including zero-sugar options and new consumer targeting, is supporting sustained demand.
• Major beverage companies are mitigating cost pressures through pricing power, scale and business models.
• Event-driven demand and improving consumer conditions could support a rebound in select alcohol categories.

Read the full transcript below:

ANDREW: Time for Hot Picks. Undaunted by rising aluminum prices, our guest is increasing his price target on Monster Beverage. We are joined by Filippo Falorni, lead analyst and director of U.S. beverages, household products and personal care at Citi. Filippo, great to see you again. Thanks for joining us.

FILIPPO: Okay, Andy, great seeing you. Great being back.

ANDREW: Tell us why you’re more optimistic about Monster Beverage, please.

FILIPPO: Yeah, absolutely. Look, I’ve been a very long-term bull on the energy drink category. I really do think this category has secular growth drivers. You have younger consumers entering the category and really using energy drinks as a replacement for coffee and coffee consumption. So we really do think that Monster is in a great position to capitalize on the growth of the category. They also have significant innovation. This year, there’s America’s 250th anniversary, so they have a lot of specific innovation around that occasion. And internationally, they continue to grow extremely well. They are distributed by Coca-Cola, and they continue to gain share in international markets. For perspective, their U.S. market share is about 30 per cent. Close to Red Bull internationally, Monster is only about 15 per cent market share compared to Red Bull, also in the 30s, so there’s still quite a bit of room for them to gain share internationally. So the topline trajectory is very favourable for the company. They do have some aluminum exposure, but we really do think that the topline upside will be more than enough to offset the margin pressure.

ANDREW: Are they? We keep hearing about declining alcohol consumption in many markets, so I guess the energy drink category is a winner there.

FILIPPO: Yeah, absolutely. You’re seeing a lot of younger consumers really drinking less alcoholic beverages, and energy is definitely one of the categories that skews toward younger consumers. The average consumer age is more in the 30s compared to most categories’ average, like 40 to 50 years old. And really, even in terms of incremental consumers, there’s a lot of new consumers coming in, both younger, but also female consumers. That’s a part of the category that is new in energy drinks. Monster is launching a new brand this year to address female consumers called Flirt, and it’s going to roll out across the U.S. in the spring. And so they are going after also these incremental consumers.

ANDREW: How do they make it more appealing to women?

FILIPPO: So there’s been a lot of brands that have been very successful there. So Alani Nu, which is owned by Celsius, is probably the most successful there. So they focus a lot more on flavour, colour in the packaging, and really more forward flavour in terms of sweetness compared to the traditional energy drinks. So that’s what Monster is going to try to do. Also, their marketing campaign is going to be a little bit less aggressive than the traditional Monster marketing, which is focused on extreme sports like the UFC. And so these marketing campaigns are going to be more targeted to a female audience compared to the core Monster brand.

ANDREW: And I believe you may have mentioned this, there’s zero sugar as well.

FILIPPO: Correct, zero sugar as well.

ANDREW: Talk to us about Constellation, the huge beer player. You like the look of this one, even though beer has been a category that’s seeing pressure on consumption.

FILIPPO: Yeah, definitely. I mean, look, beer has been tough, but for Constellation, the biggest issue that they faced in 2025 was their core consumer base. The Hispanic consumer base is under significant pressure from all the news around ICE, deportation, some fear around really going out, and that was really a big negative impact in 2025. Now we’re starting to cycle some of those impacts, and the situation got sequentially a little bit better from their core consumer base. Remember, Hispanic consumers are about 50 per cent of their consumer base. And last quarter, they reported their fiscal Q4 results, they returned to positive volume growth in beer. So they did 0.6 per cent volume growth. The comparisons ahead become even easier for them, because the slowdown in Hispanic consumers really accelerated in the summer of 2025. And this summer you’re going to have the FIFA World Cup in North America, Canada, U.S. and Mexico. And in the U.S., you’re seeing a potential one to two million incremental tourists coming in to watch games, and Constellation, given their core Hispanic consumer base, should be able to benefit disproportionately from these new tourists coming into the U.S. And so their brands are positioned very well to accelerate into the summer.

ANDREW: And then finally, Coca-Cola, the classic beverage play. Tell us how they’ve been adapting to consumers who want lower sugar, for example.

FILIPPO: Yeah, absolutely. Coca-Cola is a much more established multinational company, more of a traditional defensive name in the staples space. And look, they’ve been delivering extremely well. They’ve delivered consistently at the top end of the four to six per cent topline algorithm. I think there’s two things that they have done extremely well. One, to your point, they’ve been able to adapt their portfolio toward zero-sugar offerings. Coca-Cola Zero Sugar has been one of the most successful brands in their portfolio, and they continue to grow both in the U.S. and internationally extremely well with that portfolio. They’ve also expanded zero-sugar offerings across all their core portfolio, like Sprite, Fanta and even some of the local brands that they have.

And then the second reason is 40 per cent of their geographic mix is in emerging markets. In emerging markets, they continue to see opportunity to increase per capita consumption of soft drinks overall. In those countries, commercial beverages are only 30 per cent of beverages consumed. So every year, as disposable income increases, they see opportunities to increase the penetration of commercial beverages and to take share in many emerging markets. So those are the two things that continue to grow their topline consistently.

And the other thing that I like about Coke is that it’s a franchised model, so they don’t own their bottlers. Coca-Cola just makes the concentrate, they ship the concentrate to the bottlers, and they’re the ones responsible for converting the concentrate into the final product and bottling. So in this environment, with higher cost inflation and commodity inflation on aluminum and plastics, Coca-Cola is much more insulated than many other peers from these pressures.

ANDREW: Filippo, thank you very much indeed. Great hearing from you.

FILIPPO: Thanks for having me.

ANDREW: Filippo Falorni joining us there, and he, of course, oversees beverages and other categories at Citi.

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This BNN Bloomberg summary and transcript of the April 14, 2026 interview with Filippo Falorni are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.