Beverage Companies: Coca-Cola, PepsiCo, Diageo , From Sugar to Spirits

Beverages are a cleanly segmented industry for Shariah screening purposes. Non-alcoholic beverage companies (Coca-Cola, PepsiCo, Monster, Keurig Dr Pepper) generally pass. Alcoholic beverage companies (Diageo, Anheuser-Busch, Constellation Brands, Brown-Forman) universally fail at the sector level. There's no overlap in the middle where things get complicated, at least not much.

Let's walk through the specific companies and their screening status, and clear up a few common sources of confusion along the way.

The alcohol sector: hard no

Alcohol is one of the two substances named explicitly in the Quran as prohibited (the other being maisir, gambling). Surah Al-Maida 5:90 classifies khamr as an abomination. Every Shariah screening methodology (AAOIFI, DJIM, S&P Shariah, MSCI Islamic, FTSE Islamic) treats alcohol manufacturing, distribution, and sale as a prohibited sector.

Beyond the consumption of alcohol being prohibited, the companies involved in producing and distributing it are prohibited to invest in. The prohibition extends to:

• Producers (distilleries, breweries, wineries)
• Distributors
• Pure-play alcohol retailers
• Holding companies whose core revenue is alcohol

If a company derives more than 5 percent of revenue from alcohol, it's out. Most pure-play alcohol companies are at 95 to 100 percent alcohol revenue, so they fail by enormous margins.

Diageo (NYSE: DEO, LSE: DGE)

Diageo is the world's largest spirits and beer producer. Owns Johnnie Walker, Smirnoff, Guinness, Baileys, Tanqueray, Captain Morgan, Don Julio, Casamigos, and dozens of other brands.

Core business: 100 percent alcoholic beverages.

Sector screen: Permanent fail.

Result: Not investable under any Shariah methodology.

Anheuser-Busch InBev (NYSE: BUD)

The world's largest brewer. Budweiser, Stella Artois, Corona, Becks, Hoegaarden, and hundreds of regional beer brands.

Core business: ~100 percent beer and alcoholic beverages.

Sector screen: Permanent fail.

Result: Not investable.

Worth noting: ABInBev has historically had an enormous debt load from the SABMiller acquisition. Long-term debt around $70 billion. Debt-to-market-cap over 60 percent. But the sector fail is what matters, and no financial ratio cleanup would save the stock anyway.

Constellation Brands (NYSE: STZ)

Owns Corona (US rights), Modelo, Pacifico, Svedka, Robert Mondavi, and other beer, wine, and spirits brands. Also previously held a large stake in Canopy Growth (cannabis), which compounded the Shariah issue.

Core business: ~95 percent alcoholic beverages.

Sector screen: Permanent fail.

Result: Not investable.

Brown-Forman (NYSE: BF.B)

Jack Daniel's, Woodford Reserve, Finlandia Vodka, and other spirits brands.

Core business: ~98 percent spirits.

Sector screen: Permanent fail.

Molson Coors (NYSE: TAP)

Coors Light, Miller Lite, Blue Moon, and other beer brands.

Core business: Beer.

Sector screen: Permanent fail.

The non-alcoholic side: where it gets interesting

Now the permissible half of the beverage industry.

Coca-Cola Company (NYSE: KO)

Core business: Non-alcoholic beverages. Carbonated soft drinks, water, juice, coffee (via Costa), and some non-alcoholic RTD tea and coffee products.

Alcohol exposure: In 2018, Coca-Cola started experimenting with an alcoholic canned drink in Japan (Lemon-Dou chu-hi), and has done small test launches of other alcoholic RTD products internationally. As of early 2026, alcoholic beverage revenue at Coca-Cola is well under 1 percent of total revenue and is limited to specific international markets.

Non-permissible income: Under 2 percent. Passes the 5 percent threshold.

Debt-to-market-cap: Long-term debt around $37 billion against a market cap of ~$280 billion. Ratio about 13 percent. Passes.

Cash ratio: Low. Passes.

Result: Coca-Cola passes Shariah screening. Muslim investors sometimes worry about the Japanese Lemon-Dou launch, but the revenue share is too small to push the company over any threshold. Purify dividends for the small alcohol exposure.

Worth addressing: there's a recurring social media claim that Coca-Cola owns major alcohol brands. It doesn't. Coca-Cola and the alcohol industry are separate. The company that both produces cola and owns major alcohol brands is PepsiCo's one-time relationship, but even that was indirect. Today, neither Coca-Cola nor PepsiCo is a major alcohol producer.

PepsiCo (NASDAQ: PEP)

Core business: Non-alcoholic beverages and snacks. Pepsi, Gatorade, Mountain Dew, Aquafina, Tropicana (sold in 2022), Frito-Lay snacks, Quaker Oats.

Alcohol exposure: PepsiCo partnered with Boston Beer Company in 2022 to launch Hard Mountain Dew. This is a small alcoholic line that's distributed in the US through Boston Beer's licensing. The revenue share is tiny for PepsiCo at the consolidated level.

Pork exposure: Very limited. Some snack products have small pork-based flavorings in specific markets.

Non-permissible income: Under 2 percent. Passes.

Debt-to-market-cap: Long-term debt around $41 billion against a market cap of ~$235 billion. Ratio about 17 percent. Passes.

Result: PepsiCo passes Shariah screening. Purify dividends for the small non-permissible exposure.

Keurig Dr Pepper (NASDAQ: KDP)

Dr Pepper, 7UP, Snapple, Keurig coffee systems, Canada Dry, Green Mountain Coffee.

Core business: Non-alcoholic beverages and coffee systems.

Alcohol exposure: Minimal.

Debt-to-market-cap: Long-term debt around $14 billion against a market cap of ~$48 billion. Ratio about 29 percent. Just under the 30 percent threshold. Borderline.

Result: KDP passes screening, borderline on debt.

Monster Beverage (NASDAQ: MNST)

Core business: Energy drinks. Permissible.

Debt-to-market-cap: Very low debt. Monster has an extremely clean balance sheet. Market cap ~$63 billion. Long-term debt under $1 billion. Ratio very low. Passes easily.

Non-permissible income: Minimal. Some interest income from cash holdings.

Result: Monster passes Shariah screening comfortably.

Worth noting: In 2022, Monster acquired CANarchy, a craft beer company, which gave Monster direct alcohol exposure for the first time. The Beast Unleashed hard seltzer and Nasty Beast hard tea lines have followed. As of early 2026, alcoholic beverage revenue at Monster is approaching 3 to 4 percent of total revenue. Still within the 5 percent threshold but trending up. Worth watching in future years.

Celsius Holdings (NASDAQ: CELH)

Energy drink brand. Grew rapidly after a PepsiCo distribution partnership. Smaller company.

Core business: Non-alcoholic energy drinks. Permissible.

Debt ratio: Very low. Passes.

Result: Passes.

National Beverage Corp (NASDAQ: FIZZ)

Maker of LaCroix sparkling water and other brands.

Core business: Non-alcoholic beverages. Permissible.

Financial ratios: Clean. Passes.

Starbucks (NASDAQ: SBUX)

Technically a coffee retailer more than a beverage manufacturer, but included here because of the Nestle coffee partnership that extended Starbucks-branded products into grocery. Covered in more detail in the fast food article. Passes screening.

Nestle (VX: NESN)

The world's largest food and beverage company. Swiss-listed. Owns Nescafe, Nespresso, Perrier, San Pellegrino, Poland Spring, Gerber, and a vast food portfolio.

Core business: Food and beverages. Permissible broadly, but Nestle has some exposure to alcohol through joint ventures and distribution, plus some concerns from ethical investors about infant formula marketing and water bottling practices (the latter is an ethical concern, not a Shariah one).

Non-permissible income: Under 3 percent.

Debt-to-market-cap: Long-term debt around CHF 42 billion against a market cap of ~CHF 275 billion. Ratio about 15 percent. Passes.

Result: Nestle passes Shariah screening.

Unilever (NYSE: UL, LSE: ULVR)

Unilever is diversified beyond just beverages (personal care, food, ice cream) but owns Lipton tea and other beverage brands.

Core business: Consumer goods including food and beverages. Permissible.

Non-permissible income: Very limited. Passes.

Debt-to-market-cap: Around 20 percent. Passes.

Result: Passes.

The distributors

Worth addressing a specific corner case. Some publicly traded companies are alcohol distributors rather than producers. Examples include Constellation Brands (which has its own brands) or smaller specialized distribution companies. The distinction doesn't matter for Shariah screening. Distribution of alcohol is treated the same way as production of alcohol. Both are sector fails.

ETFs

Beverage sector ETFs like IEDI or similar typically exclude alcohol due to their narrow focus. Broader consumer staples ETFs (XLP, VDC) include names like Coca-Cola and PepsiCo (both halal) but also Philip Morris (non-compliant) and alcohol companies (non-compliant). Whether a consumer staples ETF is acceptable depends on the specific holdings. Shariah-compliant ETFs like SPUS and HLAL include the halal beverage names but exclude the non-compliant ones.

Dividend purification

For Coca-Cola, PepsiCo, Monster, and similar names that have small non-permissible exposure, Muslim investors should purify a small fraction of dividends. The standard practice is to calculate the non-permissible income ratio (usually around 1 to 3 percent) and donate that fraction of dividends to charity.

Example: You receive $500 in Coca-Cola dividends. Non-permissible ratio is about 1.5 percent. Donate $7.50 to charity without tax deduction.

The bottom line

Beverages split cleanly into halal and non-compliant categories.

Halal sector-wise (subject to ratios):
- Coca-Cola (KO): passes
- PepsiCo (PEP): passes
- Monster Beverage (MNST): passes
- Keurig Dr Pepper (KDP): passes (borderline on debt)
- Celsius (CELH): passes
- Nestle (NESN): passes
- Unilever (UL): passes
- National Beverage (FIZZ): passes

non-compliant permanently:
- Diageo (DEO)
- Anheuser-Busch InBev (BUD)
- Constellation Brands (STZ)
- Brown-Forman (BF.B)
- Molson Coors (TAP)
- Heineken (HEIA)
- Kirin, Asahi, and other Asian brewers
- All other pure-play alcohol producers and distributors

If you want beverage exposure in a halal portfolio, stick with the non-alcoholic side. Coca-Cola and PepsiCo are the classic defensive holdings in this space. Both pass screening comfortably with small dividend purification adjustments. Monster is the growth-adjacent option. Run any specific ticker through FaithScreener for current-year figures and ratios.