The sudsy nostalgia of twisting the cap off of a soda bottle or cracking open a can of pop is lost on younger users. Soft-drink consumption has been on a steady decline since 2004, and it's millennials turning their backs on Coca-Cola (NYSE:KO) that is largely to blame. 

Consumers of all ages started to turn on Coca-Cola's signature full-calorie sodas 15 years ago, but Diet Coke and its no-calorie cohorts initially picked up the baton. Millennials never fell for that sugar-free trap. They were turning to energy drinks, fancy coffee beverages, and flavored sparkling water for refreshment. Coca-Cola has done its part to try to keep up with the country's youthful beverage sippers, but sometimes that isn't enough.

A crumpled can of soda.

Image source: Getty Images.

Losing its fizz

Millennials aren't fond of Coca-Cola, and the same can be said about investors when it comes to Coca-Cola stock these days. The market's finally heading higher in 2020, but Coca-Cola shares have been left behind. The stock is trading 11% lower year to date.

The pandemic hasn't been as kind to the king of pop as you probably think. You may have seen folks stocking their shopping carts high with Coca-Cola products during the early days of the COVID-19 crisis, but that's not the only way the beverage giant gets through your pursed lips. Coca-Cola is the beverage of choice at restaurants, movie theaters, amusement parks, and other retail hangouts that have been closed or struggling in recent months. Organic revenue plummeted 26% in its latest quarter through late June.  

Coca-Cola has tried to buy its way back into the hearts and guts of millennials. It has cut big checks for Odwalla fruit juices, Fuze teas, ZICO coconut water, Glaceau vitamin-fortified water, and Costa coffees over the years. All told we're talking about an empire of more than 500 brands with over 4,700 products under those banners.

The blue chip made a big in-house splash in 2018, introducing new Diet Coke varieties in slim cans with fruity flavors including Ginger Lime and Twisted Mango. Would it be enough to wean millennials off of LaCroix? The gambles seemed to pay off. After six years of declining revenue -- fueled sometimes by currency fluctuations and unloading bottling operations, but dips nonetheless -- Coca-Cola's top line finally moved higher in 2019. It has fallen off the wagon again in 2020, and even its steady and growing quarterly payouts haven't been enough to save the day.

Coca-Cola is a Dividend Aristocrat, having increased its distributions for 58 consecutive years. Millennials may not be nostalgic enough to appreciate the streak or the steady trickle of the current 3.4% yield. Younger investors want growth, and Coca-Cola's revenue peaked in 2012 with net income hitting its high-water mark in 2010. Coca-Cola isn't a cornerstone of millennial portfolios, but thankfully for those still long the stock, it's not necessarily a company that's living in the past. We're still going to go thirsty, and Coca-Cola will try to come up with the products that consumers want next -- or it will cut another big check to get there.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.