Competition in Energy Drinks, Sports Drinks, and Vitamin-Enhanced Beverages

After reading the passage “Energy Drinks Promise Edge, But Experts Say Proof is Scant,” I have found that the author did support his claim in the title. The author explored many different points of view and facts to support the idea that energy drinks effects are miniscial. There are many ways that the author was able to provide enough support of his opinion by proving the cost and ingredient difference, giving information on both sides, and giving specific studies on the matter. After mentioning these topics and studies, it was obvious to assume that energy drinks don’t have the energy raising affects they are thought to have.

Kool-Aid, a brand that offers flavored drink mix owned by Kraft Foods is part of the soft drink industry. Three main players control the soft drink industry and they are Coke (42.8%), Pepsi (31.1%), and Dr. Pepper Snapple Group (15%). First of all, a soft drink is defined as any drink that contains water, but not alcohol. This includes soda, juice/punch, energy drink, tea, sports drink, and water. There are more than a thousand different soft drinks in the U.S. market, and among the one thousand variety of drinks, the three main players offer about 400 of them (40%). Since the three dominant brands pretty much control the market, most of the small players compete by offering inexpensive drinks that are often only sold in particular retail chain such as Sam’s Choice and Shasta Beverages. They also compete in the newer category of soft drinks such as tea and energy

The soft drink industry is one of the most highly profitable industries in the USA. Also, the competitive market is a very large market. Americans consumed about 53 gallons of soft drinks per person a year in 2000 by $ 60.3 billion!! Comparing with the market in 1990, since it was 47 gallons. In recent years, the market growth has slowed.

The existing concentrate business is largely controlled by Coca-Cola Company (Coca-Cola) and PepsiCo (Pepsi), together claiming a combined 72% of the U.S. carbonated soft drink (CSD) market sales volume in 2009. Refer to Exhibit 1 for an illustration of the CSD industry value chain. For more than a century, Coca-Cola and Pepsi have maintained growth and large market shares through mastering five competitive forces, shown in Exhibit 2, that drive profitability and shape the industry structure.

Poter 's Five Competitive Forces Analysis for Concentrate Producers, Bottlers, and Retailers in the Soft Drink Industry

1. How would you characterize the energy beverage category, competitors, consumers, channels, and DPSG’s category participation in late 2007?

The soft drink industry in the United States is a highly profitably, but competitive market. In 2000 alone, consumers on average drank 53 gallons of soft drinks per person a year. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the United States. They are the Coca Cola Company with 44.1% market share, followed by The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/Seven Up, Inc. with 14.7% market share. Each company respectively has numerous brands that it sales. These top brands account for almost 73% of soft drink sales in the United States. Dr. Pepper/Seven Up, Inc. owns two of the top ten

An industry analysis through Porter’s Five Forces reveals that market forces are favorable for profitability.

In the present society, people’s schedules tend to be extremely hectic due to either strenuous work schedules or keeping up with school and families. Due to this, numerous individuals do not obtain the recommended eight hours of sleep. On top of not getting enough sleep, they do not eat the proper foods to nourish their bodies. In return, they have a substantial lack of energy. Usually people who do not take care of themselves tend to eventually get more tired by mid-day and as their day goes on. A simple solution would be to go to bed earlier and eat better foods. However, our society has become very lazy, obese, and have started to take the easy way out over the years. Instead of eating better and trying to get more sleep, people drink

The several factors that make it very difficult for the competition to enter the soft drink market include:

Energy drinks are soda-like beverages that are chemically designed to boost your energy, performance, and increase stamina. Most of these drinks contain caffeine, sugar and many other ingredients including taurine, guarana, and ginseng. These products are generally marketed toward teanagers, students, athletes, and active people in general. As the popularity of these drinks increases so does the amount of reports they are receiving about the dangers of drinking these caffeinated substances. Energy drinks can be dangerous; therefore knowing the how they work and what is in them is key to consuming such substances safely.

Energy drinks have outperformed the growth in carbonates in the last few years, and present a substantial opportunity for beverage manufacturers to extract further growth from their sales. There are many driving forces of change and critical success factors in the energy drink industry. Companies such as Coke Cola and Pepsi contend with criticism from health officials due to the excessive caffeine in most high-energy drinks. However, before the 2000’s consumers were accustomed to carbonated soft drinks as the traditional beverage. The shift to an energy drink, sports drink, and vitamin enhanced waters increased sales while becoming an alternative beverage choice for a fast-paced mobile society. Therefore, this industry endures many

Problem identification: The global beer industry was experiencing increasing competition due to the new and potential mergers and acquisitions of

In the case of PepsiCo, analyzing the non-alcoholic beverage industry using Porter’s Five Force Analysis allows for assessment and adjustment to the strategic plans implemented to sustain competitive advantage. Porter’s Five Forces model helps outline the competitiveness of the current market through analysis of the industry rivalry between companies, supplier power, buyer power, threat of substitution, and the threat of new entries (Strategic Planning Tools, 2009). All of these forces affect not only a company but an industry. To begin, competitive rivalry within an industry analyzes the current competition within that market. When a market is competitive it “encourages companies to innovate, utilize production capacity, reduce costs and

The non-alcoholic beverages industry requires significant levels of infrastructure and technology, as well as large capital investments, in order to successfully compete in the market. As a result, it is considered as an industry with high barriers to entry that are difficult to overcome for new entrants. Additionally, the dominant position of the industry’s key players - Coca Cola and Pepsi - lower the threat of entry on the market as new entrants do not have the resources or capabilities to compete with these