Carbonated Soft Drink Industry

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Carbonated Soft Drink Industry – Overview 2487260309 Carbonated soft drinks are the most important constituents of the beverage industry. There are more than 100 players in this industry but three companies, Coca-Cola Enterprises (maker of Coca-Cola) and Britvic Soft Drinks (maker of Pepsi),and Cadbury Schweppes are the maximum stakeholders. This makes the characteristic of the industry oligopoly in nature. A key characteristic about the CSD industry is that competitors are mutually interdependent, a competitive move by one will almost certainly affect the fortunes of other companies in the industry and they will generally respond to the move – sooner or later. The growth of the major companies was directly fueled by responding to the actions of their competitors. The three major competitors dominate the CSD industry, with small specialty players filling niche markets; and companies that are caught in the middle had only two options to either exit the industry or to merge with the major players like Coke and Pepsi. Spread of market share across different companies in the exhibit 1 would give us a clear understanding about the oligopoly nature of the industry. Exhibit 1 – Top 10 CSD Companies of 2006. 2006 2006 2005 Share 2005 cases Volume Rank Companies Market Share Market Share Change (millions) %Change 1 Coca-Cola Co. 42.9 43.1 -0.2 4408.4 -1.2% 2 PepsiCo 31.2 31.4 -0.2 3207.8 -1.3% 3 Dr Pepper Snapple 14.9 14.6 0.3 1494.1 1.3% 4 Cott Corp. 5.1 5.4 -0.3 553.6 -5.9% 5 National Beverage 2.5 2.4 0.1 246.9 1.0% 6 Hansen Natural 0.6 0.3 0.3 34.9 67.9% 7 Red Bull 0.5 0.4 0.1 42.3 27% 8 Big Red 0.4 0.4 Flat 41.6 1.9% 9 Rockstar 0.3 0.2 0.1 19.0 65.3% 10 Private label and other 1.6 1.8 -0.2 175 -5% Total Industry 100 100 n/a 10,223.6 -0.6% The following graphs represent the Market Share and CSD Consumption respectively.

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