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Competition in Energy Drinks - Case Study Example

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The entry of beverage producers into new geographical markets and diversified portfolios of beverages by these companies support…
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Competition in Energy Drinks
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Download file to see previous pages More consumers have developed preference for drinks other than carbonated drinks. The demand for alternative beverages in the US in 2009 contributed to the global demand considerably, with close to half of the demand for beverages coming from the US. Sales in the US made up 42.3% of the $40.2 billion in sales in 2009. The alternative beverage section changed the status-quo in the beverage industry, since it was, at the beginning, a unique product that offered better nutritional quality.
The alternative beverage section of the beverage industry has unique economic characteristics too. To begin with, the growth of the segment depends on the purchasing power of the consumer. As more consumers become more economically empowered and their desire to have healthier lifestyles increases, they tend to switch from the carbonated drinks to the alternative beverages. Secondly, the alternative beverage section appeals to all age groups in the society (Christou & Vettas, 2003). Carbonated drinks are more associated with adults than school-going children because of the chemical components. Analysts in the industry project a decline in the sales figures for carbonated soft drinks and an increase in sales of sports drinks, ready-to-drink tea, energy drinks, bottled water, fruit juices, and vitamin-enhanced beverages among other types of alternative beverages, setting the ground for competition among companies producing alternative beverages.
Competition in the beverage industry is considerably intense, with the established companies such as PepsiCo and Coca-Cola facing stiff competition from other companies such as Redbull (Gerber, 2010). Other companies other than PepsiCo, Coca-Cola and Redbull, with a 55% market share, dominate the larger share of the global market. In the United States, PepsiCo had the larger share at 47.8%, while the other companies had 31.5% of the total market share. Both ...Download file to see next pagesRead More
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