1 - 1 What are the strategically relevant components of the global and U.S beverage industry macro-environment How do the economic characteristics

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1. What are the strategically relevant components of the global and U.S. beverage industry macro-environment? How do the economic characteristics of the alternative beverage segment of the industry differ from that of other beverage categories? Explain. The worldwide total market for beverages in 2009 was $ 1,581.7 billion. In the US, the sales of beverages during 2009 totaled nearly 458.3 billion gallons; with 48.2 percent of industry sales was from carbonated soft drinks and bottle water making up 29.2 percent of industry sales. In the market segment of alternative beverage, sports drinks, flavored or enhanced water, and energy drinks made up 4.0 percent, 1.6 percent, and 1.2 percent of industry sales, respectively, in 2009. The global market for alternative beverages in 2009 was $ 40.2 billion (12.7 billion liters), while the value of the U.S market for alternative beverages stood at $17 billion (4.2 billion liters) in 2009. In the Asia-Pacific region, the market for alternative beverages in 2009 was $ 12.7 billion (6.2 billion liters) and it was $9.1 billion (1.6 billion liters) in the European market. In general, the world beverage industry had a low growth rate. The dollar value of the global beverage industry had grown at a 2.6 percent compounded annual growth rate between 2005 and 2009 and was forecasted to grow at a 1.87 percent annual rate between 2010 and 2014. However, this indicator for the alternative beverage industry was much higher. For example, the dollar value of the global market for alternative beverages grew at a 9.8 percent annual rate between 2005 and 2009, but was expected to slow to a 5.7 percent annual rate between 2010 and 2014. The U.S. had the strongest growth internationally in alternative beverage sales with an annual growth rate of 16.6 percent between 2005 and 2009 and a forecasted growth rate of 6.7 percent between 2010 and 2014. Europe and Asia-Pacific grew at annual rates of 5.3 percent and 5.6 percent, respectively, between 2005 and 2009 and were expected to grow at annual rates of 4.4 percent and 5.1 percent, respectively, between 2010 and 2014. In the segment of specific product in the US, poor economic conditions in 2008 and 2009 led to a 12.3 percent decline in sports drink sales and a 12.5 percent decline in flavored and vitamin-enhanced waters sales between those two years. It was also the reason why the growth of energy drinks sales increased so little to just 0.2 percent between 2008 and 2009. In term of segmentation, the global market for alternative beverages was divided by product type (sports drinks, energy drinks, vitamin-enhanced beverages, energy shots, and relaxation drinks) with different demands for each group. In the U.S., sports drinks accounted for nearly 60 percent of alternative beverage sales in 2009, while vitamin- enhanced drinks and energy drinks got about 23 percent and 18 percent of 2009 alternative beverage sales, respectively. There was worldwide competition between 3 majors producers like PepsiCo, Coca-
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This note was uploaded on 11/16/2011 for the course ECON 101 taught by Professor Peter during the Spring '11 term at FH Wiener Neustadt.

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1 - 1 What are the strategically relevant components of the global and U.S beverage industry macro-environment How do the economic characteristics

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