Soft drink can be defined as beverage that is composed of carbonated or still water, a sweetening agent and natural or synthetic flavoring. Research report titled “Soft Drinks Global Overview: Growth Opportunities Between Category Lines” says, despite volatility in leading markets and as accelerating trend towards healthier beverage options, the global soft drink industry demonstrated stable volume growth in 2015.
Why there is economic uncertainty in soft drinks market?
There is a change in people preferences from soft drink to healthy drinks as they are becoming health conscious and also because of awareness of disrupting health issues from soft drinks. Carbonated soft drink is a tail spin and in 2015 its sales reached to lowest point. To meet their nutritional needs aging population as well as urban global consumer is consuming healthy and natural drinks. Due toincrease in taxes, increase in price of soft drink lead to change in consumer’s preference.
What are the growth opportunities for Soft Drink Company?
The first thing to tell about Soft Drinks Company, despite the decrease demand of soft drinks there is stability in growth. There are various reasons for this. First, companies have introduced premium hydration products which have performed well in the market in 2016. It has added value in functionality. Companies have also started producing sports drink, vitamin and hydrated products like coconut water. In 2017 companies have to face various challenges. Manufacturing of low sugar or no sugar sparkling products has been anticipated in mind of brand, government and consumer as well. And there is a need to introduce large package size and more flavours. RTD tea and coffees, cold brew coffee of Starbucks has shown an increase in sales and value growth to a large extend.There is one more success stories that is super premium juices which contain 100 percent juice have shown great response in US.
What are the macroeconomic factors which effect the industry?
First of all, the entry and exit of major firms is a trend in the industry and this will likely lead to change. Moreover merger and consolidation has been done in the soft drinks market, causing some firms to exit the industry and then re-enter themselves. A second trend in the macro environment is globalization. With the increase in use of the internet and other electronic technologies, global communication is rapidly increasing.
Key factors for competitive success within the soft drink industry branch from the trends of the macro environment. Primarily, constant product innovation is imperative. A company must be able to recognize consumer wants and needs, while maintaining the ability to adjust with the changing market. They must keep up with the changing trends.
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