This is marketing research on the Beverages industry and can include information on the background, market structure, definitions, competitors, trends and developments of beverages and is related to other topics such as wine, beer, drinks, spirits and liquor.

Table of Contents

[edit] Background

This industry is generally regarded as drinks prepared for human consumption with the exception of water beverages although essentially all beverages have water as their primary ingredient. Beverages can be alcoholic, non-alcoholic or hot beverages such as tea, coffee etc. alcoholic Drinks are treated as a separate research b=category - see "Wine Market Research" for example.

Traditionally, bottled water and carbonated soft drinks have been the staples of the beverage industry. Wine and beer are common beverage particularly in Europe. Several beverage categories have had unusually high growth recently due to focused marketing campaign and changes in consumer tastes. The tow primary categories in this area are sports drinks and energy drinks. Bottled water also continues strong growth and will likely do so in developing countries.

[edit] Market Structure

The beverages industry includes the manufacturers, raw material suppliers and retailers. In most cases, very large beverage firms have dominant positions in the retail and distribution channels for beverage products. They have long term contracts with the key retailing chains such as supermarkets and "bix-box" retailers and their market share positions are relatively secure. In most cases, producers sell products directly to retailers such as supermarket chains, etc. Some companies such as Pepsi and Coca Cola produce a broad array of beverages, including niche markets such as bottled water. They sell these beverage in different packaged product formats such as a six-pack of soft drinks. At the same time, they sell significant amounts of what are essentially condensed products such as syrups or bases to other types of distributors such as fast food chains which then ultimately sell the product as fountain drinks to the end user consumer.

In other cases, a beverage producer may sell this almost entirely through a captive retail outlet where the profit margins may be significantly higher than regular wholesale to retail distribution. A good example of this approach is Starbucks Coffee.

The industry is very large and has spurred the growth of related industries. Included in these would be the packaging industry (e.g. cans, plastic bottles, glass, etc.) in addition to providing key revenue streams for ancillary services industries such as advertising.

[edit] Industry Definitions

A sampling below of the main beverages categories, primarily marketed in the U.S.:

• Regular soft drinks - carbonated beverages with caloric sweeteners, including sweetened

carbonated water

• Fruit drinks- Fruit drinks containing less than 100% fruit juice (e.g., cranberry cocktail, lemonade),

fruit ades)

• Pre-sweetened tea - tea presweetened with caloric sweeteners
• Sports drinks- drinks with added enzymes and sweetners such as gatorade or powerade
• Plain milk - whole, reduced fat, low fat, and fat free milks, buttermilk, condensed milk,

evaporated milk

• Flavored milk - whole, reduced fat, low fat, and fat free milk combined with flavored syrup or

Powder, hot cocoa made with milk, ready-to-drink flavored milk

• Alcoholic beverages - beer, wine, cocktails, and alcoholic beverage substitutes

[edit] Market Metrics

U.S. Market

On an average, per capita consumption of beverages in the United States is about 192 gallons per year. This includes all beverages. The U.S. is clearly very different from other countries as its purchases of carbonated soft drinks for example is strikingly higher than in most other countries. Again, differences in culture and tastes have driven traditional market shares to vary greatly among different countries.

Estimates of market shares for beverages consumed in the United States 

Category                        Market Share

Carbonated Soft Drinks             28.3%
Bottled Water                      10.7%
Milk                               10.9%
Coffee                              9.0%
Beer                               11.7%
Fruit Beverages                     4.7% *
Sports Drinks                       2.3%
Tea                                 3.8%
Wine                                1.2%
Distilled Spirits                   0.7%
All Others                         15.3%

Total U.S import and export value for the year 2006 of all beverages was approximately US $17 billion. Net export value for the year 2006 was US $2.6 billion. Exports of alcoholic beverages, excluding wine, were about US $960 million in 2006 while imports in the same category were almost US $5 billion. The imports rose about 14% when compared to year 2005, with beverage imports coming from almost 130 countries.

In all, U.S. consumption of beverage in 2006 could have been almost US $100 billion.

Market distribution of major beverages consumed in the U.S. 

Segment			          2006 Consumption			% Change
		              (In millions of gallons)		       (From 2005)

Carbonated soft drinks		       15,103				  -1.1%
Bottled water				8,253				   9.5%
Fruit beverages			        4,020				  -2.4%
Sports drinks				1,348				  11.7%
Energy drinks			          227				  49.0%

World Markets

Shown below is a representation of major beverage brands consumed globally.

[edit] Industry Players

Key players in beverage industry

• Pepsi Corp
• Coca Cola
• Wal-Mart Stores
• Tesco Plc
• Carrefour
• Metro AG
• Kroger

[edit] Trends and Recent Developments

The industry faces significant current challenges. Some of the products of the industry particularly the sweetened drinks are under attack from health care professionals for their adverse affects. In addition, the packaging has raised other issues. The biggest threat to bottled water sales, for example, is the increased focus on environmental issues. This has become a major news item in 2007 with criticism directed at the environmental impact of landfill problems created by the bottles themselves. It is argued that the positive benefits of better quality water are mitigated by the need to either recycle of dispose of all the plastic or glass used in the bottles. The manufacture, storage and transport of the bottles are estimated to consume 17 million barrels of oil per year. The argument is that tap water is essentially acceptable and that the costs related to energy could have been diverted to better use elsewhere. The costs of pollution and landfill costs from all the bottles may be even higher than the energy consumed.

[edit] Sources

Organic Consumer

FAS Worldwide

IDFA News Center

Bloomberg

Wikipedia