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Industry Analysis

 

            Many brand names exist under the Coca-Cola Enterprise. These different products are all beverages but vary in the type of beverages. Three major industries that Coca-Cola Enterprises are involved in are the soft drink industry, the bottled water industry, and the tea/coffee industry.

As of 2004, Coca-Cola Enterprises possesses a market share of 43% of the soft drink industry, followed by Pepsi Inc. with 32%. However, soft drinks have been an ambiguous industry in Canada. For the year 2004, the sales of soft drinks in Canada increased slightly in volume and value terms, however, the volume sales of carbonated drinks, making up more than 50% of the total soft drinks volume, declined. The reason for such dilemma is that consumers are increasingly responding to the trend of healthy living and many have switched to healthier alternatives, such a fruit beverages (also a part of soft drink industry) and bottled water. Recently, many negative media links soft drinks to obesity, and the growing concern of obesity has caused the restriction of soft drinks to many schools. This has caused the phenomenon of a drop in carbonates but a significant volume increase for fruit juice beverages and bottled water. As a response to the drop in carbonate sales, companies have brought in many new products in an attempt to increase demand, but have been proven unsuccessful. For example, one of such new products is the Vanilla Coke, introduced in 2002 by Coca-Cola Enterprises. However, with the decline in sales of regular soft drinks, diet variants of them have prospered. “Diet soft drinks drove most of the category’s growth,” even noted Michael Bellas, chairman, Beverage Marketing Corporation. “Consumers are increasingly seeking out healthier products.” Overall, the soft drink industry is facing a shift in consumer behaviour towards healthy living. Conventional soft drink sales volumes are on the decline but many other drink sales volumes has increased, diet beverages and fruit juice beverages.  

 

 

            A second industry Coca-Cola Enterprises is highly involved in is the bottled water industry. Only bottled water without added carbonation can be considered bottled water, ones with artificial carbonization are considered soft drinks. Coca-Cola Enterprises is heavily involved within the bottled water industry. Twelve brands of bottled water exist under the Coca-Cola corporation, with the most famous being Dasani. Recently, the bottled water industry has been one experiencing rapid growth. This is aided by the increased heath concern over obesity and contamination. Many now are choosing a healthier lifestyle and have opted out of drinking soft drinks; rather, many chose bottled water. Furthermore, bottled water is perceived as more pure and cleaner than tap water. This is due to the purification process that is used by many bottled water manufacturers. As well, several incidents of contaminated municipal water supplies have raised concerns and deemed bottled water safer.

            The final major industry that Coca-Cola Enterprises is involved in is the tea/coffee (hot drink) industry. Coca-Cola Enterprises currently offers fourteen names of coffee/tea products and out of which the most famous is Nestea. In Canada, the hot drink industry has been existence for a long time and is currently classified as a mature industry. To create demand for such products, manufacturers have focused on two different aspects, the flavour and the premium products. Many bold, unique flavours, such as chocolate flavoured coffee and ginger mint tea, has been introduced into the market in a effort to stimulate and interest in new products. Similarly, manufacturers have introduced premium blends of coffee and tea in order to stimulate a sensation of class and quality. The coffee industry is full of competition, such as Tim Horton's, Star Bucks, and Second Cup. Also, fewer people under 30 years old are drinking coffee regularly, also deducting sales. In contrast, the tea industry has become a strong market. The antioxidant property has become a strong selling point for tea, and consumers are generally moving towards a healthier way of way of life, creating much more demand for tea. Furthermore, the possibility for tea flavours are vast, able to appeal to a variety of consumers.      



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