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Beverage industry

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This document analyzes competition in the energy drinks, sports drinks, and vitamin-enhanced beverages industry. It discusses key macroenvironmental factors influencing the industry. Traditional beverage categories have low profit margins and high competition, while the alternative beverage segment has high profit margins and low competition. The document also profiles the three leading companies in the alternative beverages industry - PepsiCo, Coca-Cola, and Red Bull GmbH - and provides recommendations to each on expanding their market share.

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Case Study Competition in Energy Drinks , Sports Drinks, and vitamin-Enhanced Beverages Huang Haiyang Krishna Kanth Jehimy Mantilla
Global and U.S beverage Industry macro- environment social forces Demographics political/regulatory/ legal factors global forces general economic Healthy,Music,sports culture US FDA Consumer groups Health committee Income consumers in developed countries Reduced trade barriers Improved trade cooperation US economic downturn in 2008
Economic Characteristics Traditional Beverage Categories Alternative Beverage segment LOW PROFIT MARGINS HIGH PROFIT MARGINS HIGH COMPETITION LOW COMPETITION CONSUMPTION OF CARBONATED SOFT DRINKS ENERGY DRINKS, SPORTS DRINKS, VITAMIN-ENHANCED DRINKS
Competition in the beverage industry Product Innovation Taste & Energy Boosting Properties Advertising,Unique Flavour Nutrational Properties Brand image Strong price competition
Five forces in the alternative beverage industry
Market of energy drinks, sports drinks and vitamin- enhanced beverages Trends changes Volume growth Sales growth Customers are willing to pay more Market expansion Needs for innovation
Situational Analysis
Situational Analysis
Driving Forces of the Alternative beverage industry Product and marketing Innovation Efficient distribution systems Change in the long- term growth rate Industry Consolidation
Beverage industry
Alternative beverages mid-2000s economic downturn (2008-2009) extremely popular Rapid growth in category premium prices and high profit sales : sports drinks fell 12.3% vitamin enhanced water fell 12.5% energy drinks increased 0.2%. Industry Issues Health risks (arrhythmia & insomnia) caffeine Sprite + Cough Syrup = Sizzurp Caffeine + NoDoz = Seizures Energy drinks + Alcohol = Bad News Industry Leaders PepsiCo Coca-Cola Red Bull GmbH
leading alternative beverage producers
sales - $43 billion Globalization - brands sold in 200 countries Product Lines - 2009 was the largest seller of beverages in the united states Dominate - PepsiCo. upset Coca-Cola to become the largest seller of beverages in the U.S.(2009 market share of 26.5%, Coca-Cola 11.5%) Best selling :Gatorade ,Propel,SoBe Lifewater,Amp Energy.
Recommendations 1. Consolidating in non-carbonated beverages by promoting advertisement in other countries. 2. Continuing to distribute Rockstar energy drinks, tighten the mutual relationship and marching into emerging markets namely China and India. 3. Expanding beyond their current energy drink line of Amp and No fear by developing other favors and offering different bottle sizes.
Worlds most valuable brand (Coke) 2009- third largest seller of alternative beverages in the United States Globalization - more than 200 countries Global bottling distributors Country and region specific beverage Product Lines Coca-Cola, Diet Coke, Fanta, and Sprite ranked top 5 best-selling non-alcoholic beverages worldwide in 2009.
Recommendations for Coca-Cola 1. Increasing the brand awareness of alternative beverages in Europe 2. Continuing to increase the influence in Asia 3. Increasing investment in new products and introduction of existing brands into new country markets to expand international influence 4. Capturing the Europes energy drink market.
Red Bull GmbH Third largest producer of alternative beverages worldwide Second largest seller of alternative beverages in the United States and Europe Globalization Launched in Austria in 1987 sold more than 1 million cans expanded to Hungary and Slovenia in 1992, Germany and the UK in 1994, United states in 1997 2010- exported to more than 160 countries Product Lines Red Bull only produced 4 products
Recommendations for Red Bull GmbH Expanding market penetration in South Africa Keep developing new products to stay competitive Branching out new alternative beverages lines to make profit
key factors of success 1.Product innovation (upgrade existing product, branch out into new categories) 2.Well brand-building (Top-of-mind recall ) 3.Efficient distribution systems help customer easily get touch with it.

More Related Content

Beverage industry

  • 1. Case Study Competition in Energy Drinks , Sports Drinks, and vitamin-Enhanced Beverages Huang Haiyang Krishna Kanth Jehimy Mantilla
  • 2. Global and U.S beverage Industry macro- environment social forces Demographics political/regulatory/ legal factors global forces general economic Healthy,Music,sports culture US FDA Consumer groups Health committee Income consumers in developed countries Reduced trade barriers Improved trade cooperation US economic downturn in 2008
  • 3. Economic Characteristics Traditional Beverage Categories Alternative Beverage segment LOW PROFIT MARGINS HIGH PROFIT MARGINS HIGH COMPETITION LOW COMPETITION CONSUMPTION OF CARBONATED SOFT DRINKS ENERGY DRINKS, SPORTS DRINKS, VITAMIN-ENHANCED DRINKS
  • 4. Competition in the beverage industry Product Innovation Taste & Energy Boosting Properties Advertising,Unique Flavour Nutrational Properties Brand image Strong price competition
  • 5. Five forces in the alternative beverage industry
  • 6. Market of energy drinks, sports drinks and vitamin- enhanced beverages Trends changes Volume growth Sales growth Customers are willing to pay more Market expansion Needs for innovation
  • 9. Driving Forces of the Alternative beverage industry Product and marketing Innovation Efficient distribution systems Change in the long- term growth rate Industry Consolidation
  • 11. Alternative beverages mid-2000s economic downturn (2008-2009) extremely popular Rapid growth in category premium prices and high profit sales : sports drinks fell 12.3% vitamin enhanced water fell 12.5% energy drinks increased 0.2%. Industry Issues Health risks (arrhythmia & insomnia) caffeine Sprite + Cough Syrup = Sizzurp Caffeine + NoDoz = Seizures Energy drinks + Alcohol = Bad News Industry Leaders PepsiCo Coca-Cola Red Bull GmbH
  • 13. sales - $43 billion Globalization - brands sold in 200 countries Product Lines - 2009 was the largest seller of beverages in the united states Dominate - PepsiCo. upset Coca-Cola to become the largest seller of beverages in the U.S.(2009 market share of 26.5%, Coca-Cola 11.5%) Best selling :Gatorade ,Propel,SoBe Lifewater,Amp Energy.
  • 14. Recommendations 1. Consolidating in non-carbonated beverages by promoting advertisement in other countries. 2. Continuing to distribute Rockstar energy drinks, tighten the mutual relationship and marching into emerging markets namely China and India. 3. Expanding beyond their current energy drink line of Amp and No fear by developing other favors and offering different bottle sizes.
  • 15. Worlds most valuable brand (Coke) 2009- third largest seller of alternative beverages in the United States Globalization - more than 200 countries Global bottling distributors Country and region specific beverage Product Lines Coca-Cola, Diet Coke, Fanta, and Sprite ranked top 5 best-selling non-alcoholic beverages worldwide in 2009.
  • 16. Recommendations for Coca-Cola 1. Increasing the brand awareness of alternative beverages in Europe 2. Continuing to increase the influence in Asia 3. Increasing investment in new products and introduction of existing brands into new country markets to expand international influence 4. Capturing the Europes energy drink market.
  • 17. Red Bull GmbH Third largest producer of alternative beverages worldwide Second largest seller of alternative beverages in the United States and Europe Globalization Launched in Austria in 1987 sold more than 1 million cans expanded to Hungary and Slovenia in 1992, Germany and the UK in 1994, United states in 1997 2010- exported to more than 160 countries Product Lines Red Bull only produced 4 products
  • 18. Recommendations for Red Bull GmbH Expanding market penetration in South Africa Keep developing new products to stay competitive Branching out new alternative beverages lines to make profit
  • 19. key factors of success 1.Product innovation (upgrade existing product, branch out into new categories) 2.Well brand-building (Top-of-mind recall ) 3.Efficient distribution systems help customer easily get touch with it.