1. INTRODUCTION For a number of years the main competition in the non - alcoholic sector was the battle between Coke and Pepsi for the cola market. But as the customer preferences and concerns started to change, the industry's giants have begun relying on new product flavours and looking to noncarbonated beverages for growth. Globally, the market size of this industry has been changing. Soft drink consumption has a market share of 46.8% within the non-alcoholic drink industry. Datamonitor (2005) also found that the total market value of soft drinks reached $307.2 billion in 2004 with a market value forecast of $367.1 billion in 2009. The modern soft drink industry started in 1886, when Dr. John S. Pemberton invented "Coca Cola" in …show more content…
The compound annual growth rate of the market volume in the period 2002-2006 was 11.2%. The market's volume is expected to rise to 17.9 billion litres by the end of 2011, this representing a CAGR of 12.1% for the 2006-2011 period (Datamonitor, 2007).
The major economic drivers for this growth have been market globalisation and the increase in disposable income. According to India Consumer Report of the McKinsey Global Institute (MGI), over the next twenty years Indian income levels will almost triple. Average real household disposable income will grow from 113,744 Indian rupees in 2005 to 318,896 Indian rupees by 2025, creating a 583 million – strong middle class. Rising incomes and changing customer preferences attributed to market globalisation would be a key factor driving the demand for soft drinks. This has been seen in other fast rising economies of South – East Asia where rising income and increased globalisation have contributed to an increasing trend in soft drink consumption.
2.3 Socio – cultural factors
The changing population demographics, societal concerns and lifestyles are important trends affecting the soft drink industry.
Firstly, India’s population growth rate is projected at 1.3 per cent per year over the next twenty years. This will give India a youthful demographic profile (the key segment for soft drinks) as its dependency ratio (the ratio of children and elderly to income earners) drops from 60 today to 48 by 2025. Also, if we look at the
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.
Coca-Cola- In May 1886 John Pemberton invented a drink, Coca-Cola, by accidentally stumbling on the right combination of ingredients while trying to devise a cure for headaches. Pemberton was an experienced maker of patient medicines, which were hugely popular in America in the late nineteenth century. The name was coined by one of Pemberton’s business associates, Frank Robinson. He also contributed to the promotion of the drink by sending out tickets for free samples and putting up posters and banners that read “Drink Coca-Cola, 5c.” Robinson also developed the famous logo for Coca-Cola, which appeared in newspaper
The soft drink industry in the United States is a highly profitably, but competitive market. In 2000, carbonated soft drink retail sales were estimated $60.3 billion, however, soft drink consumption growth has slowed in recent years. There are three major companies that hold the majority of sales in the carbonated soft drink industry in the U.S. They are the Coca Cola Company with 44.1% market share, The Pepsi-Cola Company with 31.4% market share, and Dr. Pepper/ Seven Up, Inc. with 14.7% market share. These three companies market the top ten brands account for 73% of soft drink sales in the U.S. Dr. Pepper/ Seven Up, Inc. owns two of the top ten brands: Dr.
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
According to my venture report buyer recognition's towards soda pops developed more grounded than any time in recent memory from the pesticide sullying discussion in late 2003, and the early rainstorm in mid-2004 in numerous locales of India, that at one point debilitated to crash development in 2014. Reacting to a progression of activities all through 2004, for example, diminishing pack sizes, presenting new flavors, expanding purposes of offer, situating on the present wellbeing blast and talking point of preference of changing customer inclinations, the aggregate volume of soda pops sold in 2014-15 surpassed four billion liters, enrolling a strong rate of 18%
• Per Capita Consumption of Soft Drink in Brazil is increasing by average rate of
In an industry dominated by two heavyweight contenders, Coke and Pepsi, in fact, between 1996 and 2004 per capita consumption of carbonated soft drinks (CSD) remained between 52 to 54 gallons per year. Consumption grew by an average of 3% per year over the next three decades. Fueling this growth were the increasing availability of CSD, the introduction of diet and flavored varieties, and brand extensions. There is couple of reasons why the industry is so profitable such as market share, availability and diversity and brand name and world class marketing.
Since the best way to segment the soft drink industry is through different age groups. The analysis of the research shows that about
These two-company’s economic characteristic include their market size and growth rate from the early 2000’s to 2010. Coke and Pepsi have struggled for years in the carbonated and non-alcoholic sector. According to Barbara Murray (2006c) "But as the pop fight has topped out, the industry 's giants have begun relying on new product flavors and looking to noncarbonated beverages for growth.” (Murry, 2006). For instance, Coke boasts in the advertisement as the king of the soft drink; as a consumer of both products, I agree. About 15 years ago, I was selected to participate in a critiquing of Coke and Pepsi products. Additionally, my travel to Africa in 2007 and 2010 provided the same raving review for the Coke Cola products. Apparently, Coke and Pepsi have been rivals for ages locally, regionally, nationally, multinational, and globally, therefore, one expects them to have an on-going rivalry when marketing the high-energy beverages.
The case explains the economics of the soft drink industry. There activities that add value to consumer at nearly every stage of the value chain of the soft drink industry. The war is primarily fought between Coca-Cola and PepsiCo as market leaders in this industry; who combined have roughly a ninety percent market share in their industry. The impact of globalization on competition has allowed both of these major players to find new markets to tap which has allowed each continued growth potential.
other soft drinks, juice, Soda and Water for several regions within the Uttar Pardesh Market, India.
Favorable demographic trends that boosted the sales of Coke and Pepsi. The per capita consumption of carbonated soft drinks increased from 22.7 to 53 gallons over the period 1970-2000 See Exhibit 4- The sales of Coke went up from 5.5 billion $ in 1980 to 20.5 billion $ in 2000. Likewise, Pepsi has nearly quadrupled its total sales over the same period to 20.4 billion $.
The Coca - Cola Company began its legacy in 1886. Dr. John Pemberton, a pharmacist from Atlanta, created the patented Coca - Cola syrup for sale in fountain
PepsiCo has the potential to encourage consumers into drinking water and eating healthier snacks that they promote. Bottled water is rising and it is a healthy substitute to sugared drinks. Restaurants, clubs and venues are using their beverage to make special drinks. This is where alcohol industries gains more profit to their company. However, with the ability to adjust customer’s demands with new and appealing products it can dominate to success.
Indian food industry, with a net market value of around US$ 300 billion, is one of the major food markets in the world. Looking at the contribution of the beverage sector in these statistics, we have soft drink (carbonated and juices) market estimated at US$ 1 billion a year and health beverages estimated at US$ 230 million, which is on a continuous verge of exponential growth.