Analysis of Smoothies
Assignment: EC180 Assignment
Analysis of Smoothies
THEO FRANKLINOS
SMOOTHIES
Introduction
This review is based on an economic analysis of the ‘Smoothie’ product market. Smoothies are chilled beverages made of pureed fresh fruit or vegetables often mixed with ice cream, yoghurt or milk. There is no main recipe for a Smoothie and the different manufacturers produce differentiated products with respect to the ingredients and texture of the drink. They may also add sugar and vitamins to the mix. Alternatives to this drink, and therefore also potential competitors, include milkshakes, carbonated soft drinks, fruit juices, energy drinks and water. The growth of smoothies in the chilled juice market has created an opportunity to help more consumers achieve their 5-a-day fruit and vegetable target. Sale value within the UK Smoothies market has increased by 513% since October 2006, to reach an anticipated £282 million in 2008. Growth has primarily been driven by increased household penetration. This has increased from 31% in 2006 to 57% in 2008. In addition, it is thought that existing smoothie converts are also drinking more (Mintel, 2008).
Factors that Affect their Demand
Demand is the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. Each consumer has an individual demand for particular goods and services and the level of demand at each market price reflects the value that consumers place on a product and their expected satisfaction gained from purchase and consumption. Demand in economics must be effective which means that only when a consumer’s desire to buy a product is backed up by an ability to pay for it does demand actually have an effect on the market (Begg, 2004).
A major factor in the demand for Smoothies is the growing interest consumers have in healthy living. Many health experts suggest the population should consume at least five different portions of fruit a day.
Analysis of Smoothies
THEO FRANKLINOS
SMOOTHIES
Introduction
This review is based on an economic analysis of the ‘Smoothie’ product market. Smoothies are chilled beverages made of pureed fresh fruit or vegetables often mixed with ice cream, yoghurt or milk. There is no main recipe for a Smoothie and the different manufacturers produce differentiated products with respect to the ingredients and texture of the drink. They may also add sugar and vitamins to the mix. Alternatives to this drink, and therefore also potential competitors, include milkshakes, carbonated soft drinks, fruit juices, energy drinks and water. The growth of smoothies in the chilled juice market has created an opportunity to help more consumers achieve their 5-a-day fruit and vegetable target. Sale value within the UK Smoothies market has increased by 513% since October 2006, to reach an anticipated £282 million in 2008. Growth has primarily been driven by increased household penetration. This has increased from 31% in 2006 to 57% in 2008. In addition, it is thought that existing smoothie converts are also drinking more (Mintel, 2008).
Factors that Affect their Demand
Demand is the quantity of a good or service that consumers are willing and able to buy at a given price in a given time period. Each consumer has an individual demand for particular goods and services and the level of demand at each market price reflects the value that consumers place on a product and their expected satisfaction gained from purchase and consumption. Demand in economics must be effective which means that only when a consumer’s desire to buy a product is backed up by an ability to pay for it does demand actually have an effect on the market (Begg, 2004).
A major factor in the demand for Smoothies is the growing interest consumers have in healthy living. Many health experts suggest the population should consume at least five different portions of fruit a day.
References: 1. Begg. D & Ward. D, (2004) Economics for Business, Maidenhead: MCGRAW-HILL 2. Begg. D, Fischer. S & Dornbusch. R, (2003), Economics 7th Ed., Maidenhead: MCGRAW-HILL 3. Gillespie. A, (2007) Foundations of Economics, Oxford: Oxford University Press 4. Maunder. P, Myers. D, Wall. N & Miller. R.L., (2000) Economics Explained 3rd Ed., Hammersmith: Harper Collins 5. Mintel Market Research (2008), Smothies UK