The Coca-Cola Co. (NYSE:KO) enters 2016 still dominant over the beverage industry, but its kingdom remains threatened.

Consumption of soda has declined every year for the past decade in the U.S., and other challenges like a strong U.S. dollar have also crunched profits. pressuring not only Coke but also fellow beverage makers like Pepsico (NASDAQ:PEP).

Coca-Cola stock finished 2015 essentially flat, up just 2%, and for the past two years the stock has bounced directionlessly between a range of $37 and $43. Because of currency translation pressures, analysts are actually expecting Coca-Cola earnings per share to decline from $2.04 to $1.99. 

Looking ahead to 2016, investors can expect Coke to continue to diversify from its traditional carbonated soft drinks into alternative beverages. In recent years, the company has made major investments in Keurig Green Mountain (NASDAQ:GMCR.DL) and Monster Beverage (NASDAQ:MNST).

Up to this point, the Keurig deal seems to have largely been a bust, with sales of the Keurig Kold underwhelming, and a private equity buyout of the company saving Coke from its paper losses on Keurig's stock. The arrangement with Monster has been more successful, with the stock gaining more than 50% since the tie-up was announced in 2014. In October of last year, the company was also considering taking a stake in Greek yogurt maker Chobani, which would have been its first step outside beverages, but it dropped that bid.

Coke's results in 2016 should be similar to last year, which is what investors such as Warren Buffett like about the stock. It's a huge brand with an economic moat, as well as strong profit margins that allow healthy dividend payouts and share buybacks, but it also has slow growth.

Coca-Cola continues to grow on a currency-neutral level. In its most recent quarter, revenues and volume improved 3%, and the company is eyeing currency-neutral EPS growth of 5% for 2015. 

This won't be the company's best year ever, but it won't be its worst, either. Investors should expect similar growth, with revenue improving in the low- to mid-single-digit range, and earnings per share in the mid-single-digit range as share buybacks help inflate the value of bottom-line profits. 

With downward pressure on the market recently, Coca-Cola stock could outperform, as the company is a classic defensive stock. It pays a dividend yield over 3%, and its sales are not generally affected by weakness in the economy as people need to drink beverages regardless of the economic situation. If 2016 turns out to be a down year for the market, expect Coca-Cola stock to outperform, as investors may turn to it as a safe haven. 

Long-term investors should also be considering Coca-Cola's prospects beyond 2016. The key question facing the company is this: Can it diversify away from sugary, sparkling beverages fast enough to keep up its modest growth? Through the first three quarters of 2015, sparkling-beverage volume was up just 1%, and health concerns could drive it to zero or into negative territory. The company's steps to invest in the growth of other beverage makers such as Monster and Keurig is evidence of a larger strategy, as it needs to put new beverages into its portfolio to maintain its growth rate.

Another option is a new drink, a healthier drink such as Coca-Cola Life, the stevia-sweetened beverage that Coke hopes will catch on. The most likely outcome is that Coke's profit margins will persist, but the company's growth will come under more pressure as health concerns chip away at its brand advantages.

Currency translation issues should ebb in 2016, but analysts only expect revenue growth of 0.6% and 3.5% in EPS. Barring an unseen shift in its business, those patterns should persist.

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.