Global Warming Is Good Business for Cola Companies

Climate change is often framed as a looming catastrophe — a driver of droughts, rising seas, and destabilized ecosystems. But for some industries, the warming planet has an ironic upside. Few have benefited more than the beverage giants. For companies like Coca-Cola and PepsiCo, record-breaking heat spells translate into record-breaking sales.

Around the world, heatwaves linked to global warming are nudging consumer behavior toward cold, sugary drinks and frozen treats. From India’s booming cola and ice cream market to U.S. households’ rising sugar intake on warm days, the business case is clear: higher temperatures mean higher thirst, and that thirst is big business for beverage companies.

This story is not just about soda and ice cream flying off the shelves. It’s also about how multinationals are adapting strategies, managing risks, and building year-round consumption habits to hedge against climate unpredictability — turning global warming into a growth engine.

How Heat Impacts Beverage Demand

When temperatures rise, consumers seek fast relief. That relief often comes in the form of cold, sweet drinks and frozen desserts.

Increased thirst for refreshment: Hot weather accelerates dehydration. As a PepsiCo India spokesperson put it, “With temperatures soaring across the country, consumers are looking for refreshing and hydrating beverages to beat the heat this summer.”
Summer as peak season: Beverage makers agree that summer is naturally the most favorable time for their category, with heatwaves amplifying demand. Even products like ice cream and milk-based drinks benefit.
Company and retailer response: Anticipating demand spikes, companies pre-build inventory, ramp up production, and secure distribution across retail and e-commerce. Coca-Cola India, for example, noted its focus on “scaling the distribution through traditional as well as newer emerging channels” to meet surging in-home and out-of-home demand.

This predictable surge makes heatwaves a reliable, if troubling, driver of business.

India’s Experience: A Case Study in Heat-Driven Growth

Few countries illustrate the phenomenon better than India. In 2024, prolonged heatwaves across the east, north, and central regions pushed beverage demand to new highs.

Cola giants see sales soar: Coca-Cola and PepsiCo reported skyrocketing demand for products ranging from Thums Up and Maaza to Pepsi, Slice, and 7UP.
Ice cream makers ramp up: Havmor Ice Cream, now owned by South Korea’s Lotte Wellfood Co., boosted production after back-to-back record summers. Its Pune factory, set to open in mid-2024, was designed specifically to meet the rising demand.
Local players expand: FMCG major Dabur India saw a spike in its Real juice and glucose portfolio. “Recognising this need, Dabur has expanded its glucose portfolio and entered the ready-to-drink glucose category,” said sales head Anshul Gupta.
Dairy diversifies: Mother Dairy announced 30 new summer products, expecting a 25–30% surge in demand. Baskin Robbins also launched new flavors and formats tailored to India’s heat-driven snacking habits.

These moves highlight how climate extremes translate directly into business opportunity — provided companies act fast to keep shelves stocked and products visible.

A Broader Trend: From Past Heatwaves to Future Summers

The link between heatwaves and beverage consumption is not limited to one year or one region.

Past events such as the 2016 heatwaves also triggered brisk sales of soft drinks and ice creams. The India Meteorological Department predicted prolonged heat waves between April and June 2024, with beverage makers responding aggressively. Even in the U.S., long-term studies show a clear correlation: as temperatures rise, so does sugar consumption.

The lesson for global brands is clear — rising temperatures consistently drive higher demand for refreshing, hydrating, and sweetened products.

The Science: Why Heat Triggers Sugar Cravings

A fascinating new study from Cardiff University provides a scientific explanation for this phenomenon. Analyzing U.S. household grocery purchases from 2004 to 2019, researchers found a direct link between hotter temperatures and higher added sugar intake.

Quantified impact: For every 1.8°F rise in temperature, added sugar consumption rose by 0.7 grams per person per day.
Biggest drivers: Beverages — sodas, fruit drinks, and frozen desserts — accounted for most of the increase.
Moderate heat, bigger effect: Surprisingly, the strongest increases occurred in mild-to-hot ranges (68–86°F), not at extreme highs, suggesting that even modest warming shifts behavior.
Socioeconomic disparity: Lower-income and less-educated households showed the sharpest increases, reflecting higher exposure to heat and fewer resources for alternatives like air conditioning or safe drinking water.

As lead researcher Pan He explained, “Even moderate warming can significantly influence dietary behavior, leading to increased consumption of sugar-sweetened beverages and frozen desserts.”

This means that global warming could drive not just more sales for Coca-Cola but also deeper public health concerns, particularly in vulnerable communities.

Cola Companies’ Strategic Adaptations

While heat is a boon, reliance on summer spikes also makes companies vulnerable to unpredictability — such as early monsoons in India that dampen demand. To counter this, Coca-Cola is pursuing an “all-weather” strategy.

Creating new consumption occasions: From festivals to family gatherings, the company promotes beverages beyond the summer months to smooth out seasonal fluctuations.
Portfolio diversification: Coca-Cola now offers everything from juices and hydration drinks to zero-calorie sodas, ensuring appeal across consumer health preferences.
Scaling homegrown brands: India’s Maaza and Thums Up have been built into billion-dollar global brands, joining Sprite in Coca-Cola’s portfolio of heavy hitters.
Marketing investments: PepsiCo launched celebrity-driven campaigns with stars like Ranbir Kapoor, Hrithik Roshan, and Rashmika Mandanna to capture summer excitement and cement consumer loyalty.

This strategic push is designed to turn climate volatility into year-round revenue, ensuring heat-driven demand doesn’t fizzle with the first rain.

Climate Change: Both Threat and Opportunity for Coca-Cola

Yet, there’s a paradox at play. The same climate change that boosts demand also threatens supply.

Water dependency: Water makes up 90–99% of Coca-Cola’s beverages, and the company uses around 300 billion liters annually. Droughts, flooding, and saltwater intrusion put this critical input at risk.
Supply chain disruptions: Floods near plants or in distribution hubs can derail operations, while long-term shifts like coastal erosion may alter entire markets.
Operational footprint: Coca-Cola’s own logistics, manufacturing, and refrigeration contribute emissions that worsen climate change — feeding the very cycle that drives demand.

To its credit, Coca-Cola has acted:

Optimizing delivery routes for 200,000 trucks.
Improving manufacturing efficiency to cut emissions.
Replacing harmful refrigerants in cooling equipment.
Returning nearly 192 billion liters of water to nature and reducing water-use ratios from 2.7:1 to 2:1 over a decade.

These efforts save costs (e.g., $300 million annually in energy savings for customers) and help preempt regulatory crackdowns. Still, challenges remain, particularly around water scarcity and future climate-driven migration patterns that may reshape demand.

The Double-Edged Sword of Heat-Driven Growth

From a business perspective, global warming is undeniably a growth driver for cola companies. But the broader implications are complicated:

Health concerns: Rising sugar intake driven by heatwaves risks worsening obesity, diabetes, and heart disease, particularly among lower-income groups.
Ethical questions: Should companies double down on promoting sugary products when demand is partly climate-driven and socially unequal?
Regulatory risks: Cities like Berkeley have already tested soda taxes to curb sugar consumption, and more may follow as public health costs climb.

For now, though, the calculus for Coca-Cola and peers is straightforward: hotter summers mean more sales, and global warming guarantees hotter summers.

Global Warming as a Thirsty Business

Coca-Cola’s old slogan asked consumers to “Taste the Feeling.” The irony of climate change is that consumers may be tasting it more often — with every heatwave pushing them toward an ice-cold Coke, Sprite, or Pepsi.

Global warming may disrupt agriculture, threaten water supplies, and reshape societies. But for the world’s beverage giants, it also delivers what every business craves: growing demand. From India’s record-breaking summers to America’s rising sugar cravings, the evidence is overwhelming: global warming is good business for cola companies.

The real question is whether that business boom comes at too high a cost — to health, equity, and the planet itself.

With inputs from agencies

Image Source: Multiple agencies