The Australian Soft drink market grew by 3.3% in 2010 to reach a valye of $10,953 million
Market value forecast
In 2015, the Australian soft drinks market is forecast to have a value of $12,721.8 million, an increase of 16.1% since 2010
MARKET SHARE
Coke is the leading player in the Australian soft drinks market, generating a 39.4% share of the markets volume
FIVE FORCES ANALYSIS
The soft drinks market will be analyzed taking manufacturers of soft drinks as player. The key buys will be taken as distributors and retailers of soft drinks, and producers of packaging, soft drinks ingredients and other raw materials as the key suppliers.
The top 3 players (Pepsi Co., Coca-Cola company and Asahi breweries) hold 54.9% of the total market volume. The buyer power of retailers in this market is moderate. Supplier power is not great, as most inputs are readily available commodities. New entrants must contend with the reach and strong brands of incumbents, although niche catergories such as smoothes present opportunities to new entrants. Not a great threat imposed by the soft drink substitues except from traditional coffee and tea or homemade juices, along with the tendancy of consumers switching towards the fruit juices. Although major players are fighting for the dominant position, the rivalty level is moderate and there is scope for growth in niche catergories.
Buyer power: in Aus, the main distribution channels for the soft drinks market are supermarkets, which account for 48.5% of the total market volume, followed closely by on-trade retailers (32.5%) the leading players generate most of their revenue from the production of concentrates, which are sold to bottling companies.
New entrants: players in the Australian soft drinks market try to distinguish their products to some extent by stressing their health benefits and taste. Although it would be difficult for a new entrant to compete with the brand strength and reach of existing players it may be possible to achieve small-scale success stressing a unique production method or nutritional benefits. However, niche catergories can be exploited by new entrants.
COCA-COLA
The Coca-Cola Company (TCCC) engages in the manufacture, distribution and marketing of non- alcoholic beverage concentrates and syrups. The company owns the world’s most valuable brand: Coca- Cola. Furthermore, TCCC markets four of the world's top five non-alcoholic sparkling brands, including Diet Coke, Fanta and Sprite. The company's finished beverage products are sold in more than 200 countries worldwide. TCCC is headquartered in Atlanta, US and employs around 139,600 people.
Most of TCCC's products are manufactured and sold by bottling partners, who convert them into finished packaged products for sale to distributors and other customers. The company sells the concentrates and syrups for bottled and canned beverages to authorized bottling and canning operations. Authorized bottlers and canners either combine syrups with sparkling water or combine concentrates with sweeteners (depending on the product), still water and sparkling water to produce finished sparkling beverages. These sparkling beverages are packaged in cans, glass and plastic bottles, and sold to wholesalers and retailers.
Coca-Cola is the biggest-selling soft drink of TCCC. Other popular soft drinks brands marketed by the company includes Beat, Canada Dry, Canning’s, Cheers, Cherry Coke, Citra, Diet Barq’s, Diet Coke, Fanta, Limca, Sprite and Vault. In addition, TCCC produces, distributes and markets a broad portfolio of energy drinks and sports drinks across the globe. Its energy drinks are marketed under brands such as Burn, Buzz, Full Throttle, Full Throttle Blue Demon, Full Throttle Fury, Full Throttle Sugar Free, glaceau vitaminenergy, Powerplay, Rehab, Samurai and TaB energy. TCCC’s sports drinks portfolio include brands such as Aquana, Aquarius, Aquarius Active Diet, Aquarius Freestyle, Powerade, Powerade aqua+, Powerade balance, Powerade Option and Powerade Zero.
KEY METRICS
The Coca-Cola Company generated revenues of $35.1 billion in the financial year (FY) ended December 2010, an increase of 13.3% over 2009. The company's net income totaled $11.8 billion in FY2010, an increase of 73.1% over FY2009.
PEPSICO.
PepsiCo is one of the leading global beverage, snack and food companies. It manufactures, markets, and sells a variety of salty, sweet and grain-based snacks; and carbonated and non-carbonated beverages in approximately 200 countries across the world. The company has its largest operation in North America (the US and Canada), Mexico and the UK.
PepsiCo operates through four business units: PepsiCo Americas Foods (PAF); PepsiCo Americas Beverages (PAB); PepsiCo Europe, which includes all beverage, food and snack businesses in Europe; and PepsiCo Asia, Middle East and Africa (AMEA), which includes all beverage, food and snack businesses in AMEA. The company's four business units are further divided into six reportable segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), Latin America Foods (LAF), PepsiCo Americas Beverages (PAB), Europe, and Asia, Middle East and Africa (AMEA).
PepsiCo AMEA manufactures and markets salty and sweet snack brands including Lay's, Kurkure, Chipsy, Red Rock Deli, Cheetos, Doritos, Ruffles and Smith’s. The division also manufactures, markets, and sells beverage concentrates, fountain syrups and finished goods under the brands Pepsi, 7UP, Mirinda and Mountain Dew. These brands are sold to authorized bottlers, independent distributors and retailers. PepsiCo AMEA owns or leases approximately 80 plants and 1,175 warehouses, distribution centers and offices. It also utilizes approximately 40 properties owned by contract manufacturers or co- packers.
KEY METRICS
PepsiCo generated revenues of $57.8 billion in the financial year (FY) ended December 2010, an increase of 33.8% as compared to 2009. The company's net income totaled $6.3 billion in FY2010, an increase of 6.3% over 2009.
MARKET DISTRIBUTION
Supermarkets / hypermarkets form the leading distribution channel in the Australian soft drinks market, accounting for a 48.5% share of the total market's volume.
On-trade accounts for a further 32.5% of the market.
MARKET FORECASTS
MARKET VALUE FORECAST
In 2015, the Australian soft drinks market is forecast to have a value of $12,721.8 million, an increase of 16.1% since 2010.
The compound annual growth rate of the market in the period 2010–15 is predicted to be 3%.
MARKET VOLUME FORECAST
In 2015, the Australian soft drinks market is forecast to have a volume of 5,308.1 million liters, an increase of 14.2% since 2010. The compound annual growth rate of the market in the period 2010–15 is predicted to be 2.7%.
