Zero Sugar Beverages Market to Reach USD 19.6 Billion by 2036 as Sugar Taxes, GLP-1 Adoption, and Portfolio Reformulation Reshape the Beverage Industry

The global zero sugar beverages market is entering a structural growth phase, projected to surge from USD 5.0 billion in 2026 to USD 19.6 billion by 2036, reflecting a robust CAGR of 14.7%. According to Future Market Insights (FMI), the acceleration is being driven by expanding sugar taxation frameworks, GLP-1 medication-led health awareness, and the strategic conversion of mainstream beverage portfolios toward zero-sugar formulations.

In 2024, the World Health Organization reinforced its recommendation that free sugar intake be limited to less than 5% of total energy consumption. This guidance continues to validate regulatory action globally and intensifies reformulation pressure on beverage manufacturers.

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FMI analysis indicates that zero sugar is no longer positioned as a niche "diet" alternative. Instead, it is rapidly becoming the default beverage standard across carbonated soft drinks (CSDs), energy drinks, iced teas, functional sodas, and ready-to-drink beverages.

Market Snapshot

• Industry Size (2026): USD 5.0 Billion
• Industry Value (2036): USD 19.6 Billion
• CAGR (2026-2036): 14.7%
• Leading Segment (2026): Carbonated Zero Sugar Drinks - 62.7% share
• Top Growth Geography: United States

Semi-annual data reveals momentum strengthening across forecast cycles. H1 2026-2036 growth is estimated at 14.5%, rising to 14.7% in H2, reflecting a 40 BPS performance upgrade in the latter half.

Structural Growth Drivers Reshaping Demand

1. Sugar Tax Proliferation and Public Health Mandates
Governments across Europe, Latin America, and North America continue expanding fiscal measures on high-sugar beverages. More than 60% of global shoppers now actively seek low- or zero-sugar drinks, signaling structural consumption change.

2. GLP-1 Medication-Led Behavior Shift
The widespread adoption of GLP-1 weight management therapies is influencing dietary patterns, with consumers increasingly avoiding high-sugar beverages. FMI identifies this as a major catalyst accelerating portfolio-wide zero-sugar conversions.

3. Functional Beverage Convergence
Zero sugar is merging with hydration, gut health, immunity, and energy positioning. The global functional beverage segment recorded 8.3% growth in 2023, with zero-calorie energy drinks and prebiotic sodas outperforming traditional CSDs.

Corporate Strategy: Portfolio-Wide Zero Conversion

Leading beverage companies are aggressively pivoting.

PepsiCo expanded its Pepsi Challenge tour in early 2026 following 30.8% year-to-date growth of Pepsi Zero Sugar in 2025-nearly double the category growth rate. FMI projects zero-sugar formulations will account for over 50% of total CSD volume in North America by 2030.

The Coca-Cola Company launched multiple Fanta Zero variants in 2025 under its Total Beverage strategy, phasing out underperforming SKUs in favor of scalable zero-sugar anchors.

Keurig Dr Pepper transitioned from zero zero-sugar offerings in 2020 to more than 40 by January 2026, marking one of the fastest portfolio pivots in the industry.

Red Bull GmbH executed a global rollout of a zero-sugar, zero-calorie version of its flagship energy drink in late 2025, strengthening its functional positioning.

Reliance Consumer Products acquired a majority stake in Goodness Group Global (Nexba) in February 2026, reinforcing emerging market expansion of better-for-you beverages.

FMI concludes that this convergence of corporate strategy confirms zero sugar's transition from optional alternative to default formulation architecture.

Regional Growth Outlook

• The United States holds the largest share of the global market, supported by strong CSD consumption scale, retail scan data momentum, and advanced zero-sugar portfolio maturity. The country is forecast to expand at a CAGR of 16.3% through 2036.
• Germany (15.8%) is benefiting from strict EU labeling regulations and demand for organic, non-GMO formulations.
• India (13.5%) is witnessing rising demand for herbal and Ayurvedic zero-sugar beverages.
• Japan (10.2%) continues to innovate in functional green tea and electrolyte-enhanced zero-calorie drinks.
• China (8.0%) is emerging as a key functional beverage growth hub, driven by urbanization and digital retail penetration.

Category Insights

Carbonated Zero Sugar Drinks (62.7% share, 2026):
Diet colas, sparkling waters, and zero-calorie energy sodas dominate, fueled by stevia, monk fruit, and erythritol reformulations.

Sports, Energy & Functional Drinks (37.3% share, 2026):
Electrolyte-enhanced hydration, nootropic-infused energy drinks, and gut-health prebiotic sodas are gaining strong Gen Z traction.

Competitive Landscape

The market remains moderately consolidated, led by multinational beverage giants with expansive global distribution networks. Strategic focus areas include:
• Natural sweetener adoption
• Functional ingredient integration
• Sustainable packaging investment
• Regional flavor customization
• M&A targeting emerging zero-sugar startups

North America continues to anchor innovation, while Asia-Pacific represents the fastest functional expansion frontier.

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Frequently Asked Questions (FAQs)

Q1. What is driving the rapid growth of zero sugar beverages?
Expansion of sugar taxes, GLP-1 medication adoption, WHO sugar guidelines, and consumer health awareness are primary catalysts.

Q2. Which segment dominates the market?
Carbonated zero sugar drinks lead with over 62% value share in 2026.

Q3. Which country holds the largest market share?
The United States leads due to mature retail infrastructure and strong zero-sugar CSD penetration.

Q4. Are natural sweeteners influencing growth?
Yes. Stevia, monk fruit, and erythritol-based formulations are accelerating clean-label adoption.

Q5. How will the market evolve by 2036?
FMI anticipates zero sugar becoming the default beverage formulation standard across CSD, energy, and functional categories.

Browse Related Insights

Fruit Beverages Market: https://www.futuremarketinsights.com/reports/fruit-beverages-market

Organic Beverages Market: https://www.futuremarketinsights.com/reports/organic-beverages-market

Fermented Beverages Market: https://www.futuremarketinsights.com/reports/fermented-beverages-market

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About Future Market Insights (FMI)

Future Market Insights, Inc. (ESOMAR certified, recipient of the Stevie Award, and a member of the Greater New York Chamber of Commerce) offers profound insights into the driving factors that are boosting demand in the market. FMI stands as the leading global provider of market intelligence, advisory services, consulting, and events for the Packaging, Food and Beverage, Consumer Technology, Healthcare, Industrial, and Chemicals markets. With a vast team of over 400 analysts worldwide, FMI provides global, regional, and local expertise on diverse domains and industry trends across more than 110 countries.

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