Gen Z drives India's zero-sugar drink boom to record high
What's the story
The popularity of zero and low-sugar drinks in India has surged to a five-year high in 2025. The trend marks the emergence of a major market segment from what was once considered an urban fad. Coca-Cola's zero-sugar portfolio, which includes Diet Coke, Coke Zero, Thums Up X Force (no sugar), Sprite Zero, Kinley water and select juice and energy drinks, accounted for a record 30% of its total volume in 2025.
Market dominance
PepsiCo also reports growth in no-sugar and mid-sugar drinks
Coca-Cola's zero-sugar segment leader, Diet Coke, saw its volumes double year-on-year. This is a major achievement for the company as it continues to lead India's ₹60,000 crore-plus soft drinks market. PepsiCo is also witnessing a similar trend with no-sugar and mid-sugar drinks contributing 59% of total volumes in Q4 2025. The company's bottling partner Varun Beverages (VBL) reported this growth in its earnings call.
Brand expansion
VBL calls it strongest annual jump in this segment
PepsiCo's no-sugar and mid-sugar drinks portfolio includes Sting, Pepsi Black, 7 Up Zero Sugar, Tropicana no-sugar variants, Evervess Soda and Aquafina. VBL termed this as the company's strongest annual jump in this segment. The trend is also seen in juices, coffee and smoothies with Tata Starbucks reporting a spike in demand early in the year as consumers prioritize wellness.
Sales surge
Zero and low-sugar beverages account for average of 30% sales
Industry executives told Economic Times that zero and low-sugar beverages now account for an average of 30% of overall sales in 2025, up from about 5% in 2020. This change is driven by increased health awareness, Gen Z preferences, and accessible price points. Companies are innovating with smaller packs and social media-led campaigns to drive adoption further.
Market trends
Investors are backing direct-to-consumer brands
Marketing consultant Srinivas Murthy said India's urban consumers are at a "generational inflection point" on wellness, with younger demographics driving volume growth. The trend is further reinforced by rising awareness around diabetes and the growing visibility of weight-management drugs. Investors are backing direct-to-consumer brands such as Go Zero, Yummy Bee and Chini Kum, which position low or no sugar as their core proposition.