Cola Wars
http://www.dea.unipi.it/staff/e.giuliani/downloads/CocaPepsi.pdf
Cola wars continue: coke and pepsi in 2012
$74B carbonated soft drink industry in the US
1975-1990s, coke and pepsi both earned average annual revanue growth of around 10%.
In 2000, us per capita CSD consumption declined.
2009, average American drank 46 gallons of CSD per year, loest since 1989.
Coke suffered from operational setbacks
Pepsi charterd new, aggressive course in altnerative beverage and snack
Challenges
Boost domestic CSD sales?
Compete how in growing non CSD category that demanded bottling, pricing, and brad strategies
What has to be doen to ensure sustainable growth and profitability?
Economies of the US CSD Industry
Consumed 23 gallons of CSD annually in 1970, consumption grew by 3% per year over next 3 decades.
Availability of CSD
Diet and flavored varieties
Declining prices made CSD more affordable
Americans drank more soda than any other beverage.
Within the CSD category, cola segment maintined dominance, although market share dropped from 71% in 1990 to 55% in 2009.
Production of CSD involved 4 major participants: concentrate producers, bottlers, retail channels, suppliers
1) Concentrate Producers
Blends RM, packaged, shipped containers to bottler.
Diet, added artifical sweetner
Regular, added sugar or corn syrup
Manufacturing little capital investment in machinery, OH, or labor
Costs $50M to $100M to build
Significant costs from ad, promo, marketing research, bottler support. Negotiating “customer development agreements” with nationwide retailers like walmart. Took lead.
Offered funds for marketing in exchange for shelf space.
Negotiated with suppliers to achieve supply, fast delivery, low prices
Coke and pepsi claimed 72% of the us CSD market sales volume in 2009, following by Dr.Pepper Snapple Group and Cott Corporation, and prive label manufacturers and regional producers.
2) Bottlers
Purchase concentrate, added water and corn syrup,
Cola wars continue: coke and pepsi in 2012
$74B carbonated soft drink industry in the US
1975-1990s, coke and pepsi both earned average annual revanue growth of around 10%.
In 2000, us per capita CSD consumption declined.
2009, average American drank 46 gallons of CSD per year, loest since 1989.
Coke suffered from operational setbacks
Pepsi charterd new, aggressive course in altnerative beverage and snack
Challenges
Boost domestic CSD sales?
Compete how in growing non CSD category that demanded bottling, pricing, and brad strategies
What has to be doen to ensure sustainable growth and profitability?
Economies of the US CSD Industry
Consumed 23 gallons of CSD annually in 1970, consumption grew by 3% per year over next 3 decades.
Availability of CSD
Diet and flavored varieties
Declining prices made CSD more affordable
Americans drank more soda than any other beverage.
Within the CSD category, cola segment maintined dominance, although market share dropped from 71% in 1990 to 55% in 2009.
Production of CSD involved 4 major participants: concentrate producers, bottlers, retail channels, suppliers
1) Concentrate Producers
Blends RM, packaged, shipped containers to bottler.
Diet, added artifical sweetner
Regular, added sugar or corn syrup
Manufacturing little capital investment in machinery, OH, or labor
Costs $50M to $100M to build
Significant costs from ad, promo, marketing research, bottler support. Negotiating “customer development agreements” with nationwide retailers like walmart. Took lead.
Offered funds for marketing in exchange for shelf space.
Negotiated with suppliers to achieve supply, fast delivery, low prices
Coke and pepsi claimed 72% of the us CSD market sales volume in 2009, following by Dr.Pepper Snapple Group and Cott Corporation, and prive label manufacturers and regional producers.
2) Bottlers
Purchase concentrate, added water and corn syrup,