2014-04-17 03:12:02 - Global Soft Drink & Bottled Water Manufacturing - a new market research report on companiesandmarkets.com
Strong volume growth in emerging markets and rising demand for bottled water and other non-carbonated products in more mature markets underpin industry success. Driven by rising disposable income in most regions, industry revenue is expected to increase 0.6% in 2013 to $197.7 billion. This is despite the industry´s major product, carbonated soft drinks, gradually losing market share as consumers shift toward healthier beverages, especially in developed markets.
The global economic downturn constrained demand across most of the Global Soft Drink and Bottled Water Manufacturing industry´s markets, causing industry revenue to contract. Consequently, the industry´s revenue is estimated to have grown at an annualized rate of just 0.6% since 2008.
The industry was transformed when The Coca-Cola Company (TCCC) and PepsiCo merged with
their respective North American bottling operations in 2010. Prior to this, both companies´ main business was selling beverage concentrate or syrup. The companies outsourced the manufacturing and distribution of soft drinks to regional bottlers, which allowed the parent companies to focus on marketing and product innovation. However, the steadily declining sales of carbonated soft drinks in mature markets, the growing market power of big-box retailers like Walmart and Costco, and the economic downturn led the soft drink giants to buy back their bottling operations. This has helped streamline both companies´ operations, significantly cutting costs and providing them with greater control and flexibility with their distribution networks. The industry is continuing to consolidate, which has decreased the number of industry operators at a 3.3% annualized rate since 2008 to 4,723 in 2013. Profit is estimated to average 4.9% of revenue in 2013 and has benefited from efficiencies gained through these mergers, but is still pressured by rising input costs.
Over the next five years, the industry will benefit from better economic conditions in emerging markets across Asia, Latin America and the Middle East, with rising disposable incomes and urbanization fueling demand for both carbonated and non-carbonated products. Expected rising global temperatures will benefit the industry, as people increase drink consumption in hot weather. Over the five years to 2018, IBISWorld forecasts that industry revenue will grow at an annualized rate of 2.8% to $227.5 billion.
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