작성일자: 2013.7.11

조사책임자: 마이애미무역관 전미성(marie.jeon@kotra.or.kr)

 

 

1. Demand Trend

 

 ○ In USA, Q1 2013 in beverage market has been very poor for low calorie carbonates in spite of significant industry investment in new product development. Several smaller brands have buckled under the pressure of the economic climate, and have been sold or consolidated into larger businesses.  Juice has recorded its first real growth for several years, thanks to the declining costs of raw materials. Energy drinks have eased back into the market as it continues to suffer criticism for marketing high caffeine products to youngsters. Whilst the USA beverage industry continues to suffer criticism based on the environmental impact of its discarded containers, and the negative impact on health brought on by excessive consumption of sugary drinks, New York Mayor Michael Bloomberg'sban on the sale of sugary drinks in containers exceeding 47.3cl (16oz) has been overturned by Supreme Court judge Milton Tingling.

 

 ○ The soft drink industry spans sparkling drinks, concentrates, juices, bottled water, smoothies, ready-to-drink tea and coffee, and functional drinks. Soft drinks do not usually contain alcohol, though can have up to 0.5% alcohol content. They are generally made on a still or carbonated water base with added flavors and sweeteners, and sometimes fruit juices or caffeine.

 

 ○ As of 2010, there were 151 companies in the U.S. soft drink industry that manufacture flavoring syrup concentrates, powdered concentrates, and related products for use in soda fountains or for manufacturing soft drinks. Their products are sold primarily to soft drink producers and grocery wholesalers.

 

 ○ As of 2010, there were 1,209 companies in the U.S. soft drink industry that blend ingredients such as water, liquid beverage bases/syrup, and sweeteners, and then package and distribute these beverages for sale. Excluded from this industry grouping are alcoholic beverage producers and companies that only produce beverage ingredients or distribute beverages.

 

2. Future Outlook

 

 ○ The Group of Eight (Canada, France, Germany, Italy, Japan, Russia, the UK and the US) generated almost $291 billion in soft drinks sales in 2010, according to MarketLine. The group’s global soft drink industry is predicted to hit almost $310 billion in 2015. The US leads the group with a near 43% share in the market, generating almost $125 billion in sales. In 2015, the US soft drinks market is predicted to exceed $127 billion.

 

 ○ Carbonated, or sparkling drinks, are expected to generate more than $209 billion in revenues in 2014, reports MarketLine. In 2014, the world carbonated soft drink industry is expected to produce over 197 billion liters, a 10% rise in five years. Cola leads the market with a 42% stake. Americas represent over 54% of the world market. Coca-Cola is the market’s top company, accounting for over 42% of the overall market. Carbonates represent 40% of the global soft drink industry. Other large companies on the market include: Red Bull, Dr Pepper Snapple and PepsiCo.

 

 ○ The global functional drinks market, which encompasses sports drinks, energy drinks, and nutraceutical drinks, is expected to exceed $62,000 million in 2015, according to MarketLine. This will represent a near 30% increase in five years, bringing market volume to over 16,135 million liters. Energy drinks lead the market segment with a near 58% stake. Americas represent more than 38% of the global functional drinks market. PepsiCo is the number one company in this category generating more than 24% of overall market volume. Sports drinks comprise a well-established market with steady consumption, whereas energy drinks promises great potential and is a rapidly growing market. Energy drinks are becoming increasingly popular as consumers show greater awareness and assume more responsibility for health-related issues.

 

 ○ The global market for bottled water is expected to exceed $126 billion in 2015, reports MarketLine. This represents 27% market expansion in five years, bringing market volume to almost 183 billion liters, 20% more than in 2010. Still unflavored water represents 65% of the bottled water market. The EU holds more than half of the overall market, which is lead by Danone with a 14% stake in terms of volume. Market drivers include greater health awareness, higher consumer spending, larger population and lifestyle trends. Marketing and product differentiation are key with companies focusing on product innovation, and packaging in terms of weight and brand image.

 

 ○ The global juice market, which encompasses fruit and vegetable juice, nectars, and fruit drinks, is expected to see growth slow to under 2% yearly to exceed $92 billion by 2015, reports MarketLine. The segment is lead by 100% fruit juice with over 30% market share. According to Global Industry Analysts, the global fruit and vegetable juice market will exceed 64 billion liters by 2015. Market drivers include rising awareness surrounding health and nutrition.

 

3. Demand Determinates

 

□ Flavoring Syrup and Concentrate Manufacturing Industry

 

 ○ As previously mentioned, demand for syrup and concentrates is heavily dependent on the demand for soft drinks. This is due to the fact that bottlers are legally tied to a manufacturer and must purchase all the syrup necessary to meet their downstream demand from the syrup/concentrate producer. As a result of this strong correlation, the demand determinates of the flavoring syrup and concentrate manufacturing industry in the United States are the same as the demand determinates described below for the soft drink manufacturing industry.

 

□ Soft Drink Manufacturing Industry

 

 ○ A number of factors determine demand for soft drinks. The first determinant is price, as the demand for soft drinks is relatively price-elastic. This means that as the price of soft drinks increases, the demand decreases to a greater degree, relative to the price change. demand for soft drinks is also relatively income-elastic, meaning that as consumers’ incomes decrease, the demand for soft drinks decreases to a greater degree, relative to the income change, and vice versa. Consumer lifestyles and tastes also affect demand for soft drinks. The reduced emphasis on family meals and the increased desire for convenience food and takeaway products may increase demand for soft drinks, especially RTD products, as they are packaged to meet this grab-and-go lifestyle. Along the same lines, as people become busier, they look for soft drinks to provide energy and rejuvenation, thereby spurring growth in the functional beverage categories. While this presents an opportunity, it is not expected to override the other factors that are negatively impacting demand for soft drinks at this time. Health issues are a hot topic with many consumers and, as a result, are driving demand in both directions. Soft drinks developed to be low-calorie, low-sugar, and preservative-free are in line with consumers’ health consciousness, and demand for these products is increasing. At the same time, the public debate about nutrition, and specifically about SSBs, has reduced demand for nondiet CSDs or shifted demand to diet CSDs.

 

4. Korean beverages on World Market

 

 ○ It is easy to see foreigners drinking “Made in Korea” labeled beverages in big cities around the world - Tokyo, Beijing, New York, and many others. The number of overseas consumers who enjoy drinking Korean beverages is steadily increasing. Young Japanese women drink Hongcho (Korean vinegar beverage brand) to be as beautiful as members of the Korean girl group KARA. Health-conscious New Yorkers sip a Korean aloe beverage instead of coke. Chinese fans of Hallyu (Korean culture wave) star Lee Min-ho enjoy drinking the banana flavored milk drink that Lee Min-ho advertises.

 

 ○ After the exports of Korean beverages first surpassed US $100 million in 2010, it took only two years to double the sales to US $200 million. What’s the secret behind the fast growth of exports of Korean beverages in such a short time? Korean beverages resound well in the worldwide healthy lifestyle trend in the beverage market.

 

 ○ Among Korean beverages exported to the world, aloe beverage is the biggest hit. Generally, aloe is known for its health and beautifying effects. The Korean aloe beverages taste very sweet. They are actively exported to 150 countries. Korean fruit juices, such as Sac Sac and Coco Palm, flatter consumers’ senses by adding the fun of chewing to the drinking sensation. The vinegar beverage Hongcho (product of Daesang) has become the best-selling vinegar beverage in Japan. Grain beverages Morning Rice and Sky Barely (both are produced by Woongjin Foods) are among the most popular in Southeast Asian countries, including Singapore. Other Korean beverages - carbonated drinks, milk drinks, and energy drinks - are also emerging as hot items in many countries because of the reasonable pricing and good quality.

 

 ○ Among the variety of Korean beverages exported to the US, American consumers’ favorites are aloe beverages. In the past, aloe beverages were most popular with the people from Central and South America who had moved to the US. But these days many Caucasian Americans purchase aloe beverages. Adult diseases, including obesity, are a major issue in the US, so many American consumers are looking for healthy beverages like aloe juice instead of carbonated drinks like coke. Aloe Vera (produced by OKF) is enjoying a particular popularity. There are several reasons for this. First, unlike many other aloe beverages, Aloe Vera is made only with natural organic aloe. Second, the aloe gel contents let us consume the best part of aloe to the maximum. Last but not least, the beverage stimulates consumers’ curiosity by adding the fun of chewing aloe to the drinking sensation.

 

5. Competitive Trend

 

□ The following list is based on worldwide sales for U.S. Companies and foreign-held companies that have significant sales in the United States. Figures represent published sales for public companies, voluntarily disclosed sales from private companies, and estimates based on industry sources and publicly available business reporting sources.

 

□ The Coca-Cola Co. continued to lead the list by recording an additional $1.5 billion in sales compared with 2011. This year’s list also saw new entries as Corporations orchestrated spin-offs such as Mondelez International, the global snack food business that was spun-off from Kraft Foods Inc.’s North American grocery business, now called Kraft Foods Group Inc., as well as D.E. Master Blenders 1753, a Dutch coffee company that was spun-off from Sara Lee Corp. The list also showcased the industry’s growth in 2012 with the cut-off rising from last year’s $32 million to $41 million in global beverage sales. And once again, the median standards increased with the 50th company — The Boston Beer Co. — reporting $580 million in beverage sales, which is $116 million more than last year’s midpoint of $464 million, representing a 25% increase.

 

* Estimate † Includes all operating units ‡ RTD Tea sales only †† Tea sales only ††† Bottled water only

 

 

□ Overview of Three Major Players

 

 ○ This section briefly outlines the major players in the U.S. soft drink manufacturing industry and the flavoring syrup and concentrate manufacturing industry. Emphasis is placed on defining the different operational structures the three major players (Coca-Cola, PepsiCo, and Dr Pepper Snapple Group) have in place, in addition to looking at future growth opportunities and recent acquisitions.

 

□ The Coca-Cola Company

 

 ○ Coca-Cola is a leading manufacturer, distributor, and marketer of soft drink concentrates and syrups. It owns or licenses more than 500 brands across all categories of soft drinks. The company is headquartered in Atlanta, Georgia.

 

 ○ Until 2010, Coca-Cola sold its syrups and concentrates to a number of contracted independent bottlers that would produce, bottle, and distribute the final product. In February 2010, Coca-Cola bought out the remaining interests in Coca-Cola enterprises, the main contracted bottler, giving the Coca-Cola Company control over 90% of the North American volume.

 

 ○ The North American business segment consists of the company’s operations in the United States, Canada, Puerto Rico, the Virgin Islands, and the Cayman islands. The segment operates three business units: sparkling beverages, still beverages, and emerging brands. The North American business segment owns and operates nine still beverage production facilities, 10 principal beverage concentrate and/or syrup manufacturing plants, and four bottled water facilities; leases one bottled water facility; and owns a facility that manufactures juice concentrates.

 

□ PepsiCo, Inc.

 

 ○ PepsiCo is one of the largest food and beverage companies in the world. Its products include a variety of salty, sweet, and grain-based snacks as well as CSDs and non-CSDs. The company is responsible for the manufacturing, marketing, and sales of these goods. It has 18 brands in its portfolio and is headquartered in New York.

 

 ○ PepsiCo is divided into three business units: PepsiCo Americas foods (PAF), PepsiCo Americas Beverages (PAB), and PepsiCo international (PI). These three business units are further divided into six reportable segments: Frito-Lay North America (FLNA); Quaker Foods North America (QFNA); the Latin American food and snack businesses (LAF); PAB; Europe; and Asia, Middle east, and Africa (AMEA).

 

 ○ FLNA is responsible for marketing the company’s branded snacks. QFNA is responsible for the manufacturing, marketing, and distribution of cereals, rice, pasta, and other branded products. LAF is responsible for the marketing and distribution of branded snacks in Latin America. PAB is responsible for selling beverage concentrates, fountain syrups, and finished goods under various Pepsi brand names. PAB also manufactures or uses contract manufacturers to market and sell RTD beverages and water.

 

 ○ In North and South America, PAB owns or leases approximately 20 plants and production processing facilities, and approximately 65 warehouses, distribution centers, and offices. In addition, the company has an ownership interest in approximately 80 bottling plants. The company’s contract manufacturers also own or lease approximately 55 plants and production processing facilities, and approximately 50 warehouses and distribution centers. In March 2010, PepsiCo completed the acquisition of its two largest bottlers, Pepsi Bottling Group and PepsiAmericas.

 

□ Dr Pepper Snapple Group

 

 ○ The Dr Pepper Snapple Group is a leading integrated brand owner, bottler, and distributor of soft drinks in the United States, Canada, and Mexico. The company has 15 brands and is headquartered in Plano, Texas.

 

 ○ The company is divided into three business segments: beverage concentrates, bottled beverages, and Latin American beverages. The beverage concentrate segment manufactures and sells beverage concentrates in the United States and Canada. The majority of the manufacturing is done at the Dr Pepper Snapple plant in St. Louis, Missouri. The company uses a combination of third-party bottlers and proprietary manufacturing systems to produce the final products. Nearly half of the company’s annual U.S. volume is distributed by its company-owned bottling and distribution network. The remainder is driven through third-party/licensed bottlers and distributors, including those in both the Coca-Cola and PepsiCo bottling systems, as well as independent bottlers, brokers, and distributors.

 

 ○ In 2009, 72% of Dr Pepper Snapple total volumes were distributed through the former Coca-Cola and PepsiCo bottling partners (these bottling partners were recently acquired by the Coca-Cola Company and PepsiCo inc., respectively). Pepsi Bottling Group, inc. (PBG) and Coca-Cola Enterprises, inc. (CCE) were the two largest customers of Dr Pepper Snapple’s Beverage Concentrate segment, and constituted 25% and 23%, respectively, of net sales during 2009.

 

 ○ The Bottled Beverages segment manufactures and distributes bottled soft drinks and other products, including Dr Pepper Snapple brands, third party–owned brands, and certain private-label soft drinks, in the United States and Canada.

 

 ○ Finally, the Latin American Beverage segment primarily manufactures beverages in Mexico and distributes throughout Latin America. The major brands contained in this segment are Peñafiel, Squirt, Clamato, and Aguafiel.

 

 ○ As of December 2008, the company operated 24 manufacturing facilities across the United States and Mexico. The group’s distribution network consists of approximately 200 distribution centers in the United States and approximately 25 distribution centers in Mexico. The company manages the transportation of its products using a combination of a group-owned fleet of more than 5,000 delivery trucks and third-party logistics providers.

 

6. Distribution Channel

 

 ○ Once bottled, soft drinks may be distributed through a variety of different channels before making it into the hands of the final consumer. While a portion of the soft drinks are sent from the bottler to distributors, who serve as middlemen facilitating further distribution and warehousing, the majority of soft drinks are sold directly to merchants. The most significant distribution channels for soft drinks are depicted in Figure 7.

 

* Based on data from IBISWorld Industry Report 31211, Soda Drink Production in the US

* Source: www.IBISWORLD.Com

 

 ○ Supermarkets and general merchandisers such as Wal-Mart and Target account for almost half the total volume, making up the largest single market for the sale of soft drinks and bottled water. This channel is by far the most reliable source of sales for soft drink producers in the industry.

 

 ○ The next largest market is the food service and drinking place channel, which includes fast food and takeout outlets, diners, full-service restaurants, and bars. As a result of the economic downturn, sales via this channel have decreased as fewer people are dining out. The next channel is convenience stores, which include stand-alone convenience stores and stores attached to gas stations. These are key and growing markets due to their typical 24-hours-a-day, seven-days-a-week operating schedules, which increase sales volume and target the growing population of consumers who are on the go. The vending machine channel is an important outlet for impulse purchases made at places like rail or bus stations, where few alternatives exist; this channel accounts for 11% of the total volume. Rounding out the channels are other minor markets such as drug stores, private clubs, and recreation centers, which make up 8% of the total channel volume.

 

 ○ Finally, exports of finished goods made in the United States to Canada, Japan, and Mexico only account for 1% of the total channel volume. Although many of the larger brands are very popular in these and other foreign countries, the brand owners typically license manufacturers within the other countries to produce the soft drinks instead of exporting them from the United States.

 

7. Retail Pricing Trend

 

 ○ Most of the Aloe/Vegetable fruit juices could be found in the following retail stores:  Asian Food Grocer, Asian Grocery Stop, eBay, EFoodDepot.com, eVitamins, Green N Brown, iHerb.com, KV Supply, LuckyVitamin.com, Ludden's Natural Products, Newegg.com – TheLatinProducts, Newegg.com – VitaDigest, Sears - Baby Care, Soap.com, SoyMedical.com, SupplementWarehouse.com, Vitacost.com, Vitamin Shoppe, VitaminLife, Walmart, Fewer, etc.