Nonalcoholic Beverage Manufacturing Industry Overview

Excerpt from Nonalcoholic Beverage Manufacturing Report

Companies in this industry produce soft drinks, bottled water, and ice. Major companies include Coca-Cola, Dr. Pepper Snapple, and PepsiCo (all based in the US), along with Danone (France), Nestlé (Switzerland), and Suntory (Japan).

Competitive Landscape

Demand for nonalcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large companies have economies of scale in production and distribution. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. The industry is highly concentrated: the top 50 companies account for 90 percent of revenue.

Products, Operations & Technology

Major products include soft drinks (about 85 percent of industry revenue), bottled water (about 10 percent), and manufactured ice (less than 2 percent). Soft drinks include sodas (also referred to as carbonated soft drinks, or CSDs), as well as tea and coffee drinks, sports drinks, energy drinks, fruit and vegetable drinks, and artificially carbonated water. The manufacture and distribution of most national soda brands, including Coke and Pepsi, is a two-tiered process. The primary manufacturer produces a flavored syrup called concentrate that is sold to local bottlers who manufacture and distribute the finished product. In a typical bottling operation, the flavored syrup, corn syrup (sugar), and filtered water are mixed in appropriate proportions, carbon dioxide gas is injected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged.