Factors causing the decline in CSDs and Cola Sales:
Carbonated Soft Drinks (CSDs), the foundation of Coca-Cola’s brand is declining, although it still holds the highest market share in comparison to non-CSD beverages. Coca-Cola is at risk of eventually producing a negative return from its CSDs and to be outperformed by non-CSDs, non-carb beverages and bottled water within its own product line, and with its competitors if the current trends persist in the future. A combination of factors have played a role in the CSD downturn, including a significant change in consumer behaviour and perceptions, government regulations, increase in input prices, competitor innovations, financial indicators and production complexities that all contribute to Coca-Cola’s diminishing sales for which will all be examined and discussed in detail throughout the following body.
In 1886, Coca-Cola was developed and its bottling network grew rapidly and reached 370 franchises by 1910. Its introduction of a carbonated soda beverage was like no other on the market where demand had a steady incline until the mid-2000s. During this period, the market entered into an economic downturn, sales declined as consumers opted for cheaper alternatives. (#) In addition to a lowered disposable income, there have been growing health concerns about CSDs and proven linkage between obesity and nutrition. The public began to view the ingredients as unnatural and unhealthy, where hazardous concerns about ingredients increase from 40% in 2004 to 53% in 2010. In response, initiatives to discourage purchase involved a 20% tax with the intentions to cut calorie intake from sugary drinks by up to 49% a per a day in the US and the banishment of these drinks on school premises had a negative effect on Coca-Cola’s sales and market share. Coke’s annual report identified obesity and health concerns as the number one risk factor for...