ZEST-O

Topics: Drink, Coffee, Beverages Pages: 5 (1346 words) Published: October 1, 2014
a. Market size ……………………………………………………………………………...
b. Market growth rate ……………………………………………………………………...
c. Market profitability …………………………………………………………………….
d. Industry cost structure ………………………………………………………………….
e. Distribution channels ……………………………………………………………………
f. Market trends ……………………………………………………………………………
g. Key success factors

A. Overview of the Industry
The beverage industry in the Philippines has increased its market volume in the recent years as the fruit of gaining popularity and support from majority of the Philippine population. According to Euromonitor.com, after reporting a total volume drop of 2% in the previous year, juice recovered to be among the most vibrant soft drinks categories in 2013. Total juice volume ballooned by 8% supported by the products’ popularity among schoolchildren and the increasing health-consciousness in the country. Manufacturers continue to cash in on the local perception that juice is healthier than other popular soft drinks products like carbonates. It should be noted that, in 2013, the Department of Education banned the selling of carbonated drinks in school premises. Juice benefits from this development as it is among the beverages geared at children. B. Market Profile

The target market of Zest-O in general are the kids and moms. These consumers can afford consumption for such beverages and therefore, better chances of high sales volume. Simultaneously, they also have the tendency to be more aware of health and wellness needs basically due to unlimited access to the diverse forms of media for advertising and promotions as carriers of information. As mentioned earlier, the Philippines, having a warm climate, is not such a comfortable place to be in especially during the peak of heat waves. For the local consumer, it’s all natural to look for a thirst-quenching treat in compensation for the discomforts of the heat. In line with this, demand for refreshing beverages significantly boosts during the months of March, April and May, while the rest of the year, the demand lessens partially yet remains constant. C. Market Size

Based on the preliminary results of the 2012 Census of Philippine and Industry (CPBI) conducted nationwide, the Philippines had a total of 173,900 Value of Production of Key Manufacturing Enterprises by Beverage Industry for the year 2012. Table 1 shows that Beverage Industry for the year 2009 garnered the lowest number of value of production of key manufacturing enterprises at 123,300 (71.9%) followed by the year 2010 with 141,700 value of production of key manufacturing enterprises. Table 1

Link: http://www.nscb.gov.ph/secstat/d_estab.asp
Industry cost structure

A value chain is a model used to disaggregate a firm into its strategically relevant value generating activities, in order to evaluate each activity's contribution to the firm's performance (Terms V 2006). Through the analysis of this model we can gain insight as to how a firm creates their competitive advantage and shareholder value. The value chain of the nonalcoholic beverage industry contains five main activities. These include inbound logistics (suppliers), operations, outbound logistics (buyers/ customers), marketing and sales, and service. Inbound Logistics (Suppliers)

Zest-O’s suppliers provide them with materials such as ingredients, packaging and machinery. In order to ensure that these materials are in satisfactory condition, Zest-O has put certain standards in place which these suppliers must adhere to (The Supplier Guiding Principles). These include: compliance with laws and standards, laws and regulations, freedom of association and collective bargaining, forced and child labor, abuse of labor, discrimination, wages and benefits, work hours and overtime, health and safety, environment, and demonstration of compliance (Zest-O 2006). From time to time, Zest-O uses third parties to assess their suppliers by having interviews with employers and contract workers. If...
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