Cola War

Cola War Soft drinks are profitable because it is a $60 billion industry in the United States alone. Not only is it profitable in the United States, but both Pepsi and Coca-Cola have expanded their franchises internationally and both have become competitive brands. It is estimated that the average American can consume about 53 gallons of carbonated soft drinks a year. According to the article, Americans drink more soda than any other beverages on the market today, such as sports drinks, juices, and beers. This makes carbonated soft drinks more profitable than the other beverages because it has a higher consumption rate. Another reason why carbonated soft drinks are profitable is that it is easy to make since it is made up of a flavor base with added sweetener and carbonated water. These main ingredients are relatively cheap compared to the bottling process. Since 1970, the growth of carbonated soft drinks continues to rise 3% per year for the next 30 years because of diet carbonated soft drinks and other flavored drinks. Soft drinks are also found in supermarkets, convenient stores, vending machines, and restaraunts. This makes the soft drinks more accessible to their customers. Soft drinks are also consumed by cans, plastic bottles, glass bottles, and fountain drinks.
Concentrates are more profitable than bottling cola because concentrates are made by blending the raw ingredients together before it gets shipped to the bottler. On average a concentration plant can cost anywhere between $25-50 million and could serve the whole population of the United States. Also, with concentration plants, there is little capital investment spent on machinery, manufacturing, overhead and direct labor. Most of the concentration plants spend their money on building their trademarks and advertising. Concentration plants negotiate with the bottlers’ major suppliers to encourage a reliable supply of concentrates, faster deliveries and lower prices, which leads to