Alternative Beverage

Industry

Kyle HollowayJessica JonesScott Shields

Devin Stewart

Outline of Presentation

Identification- Jessica Jones Analysis –Scott Shields Financials – Kyle Holloway Concerns/Recommendations – Devin

Stewart

Alternative Beverage Industry The alternative beverage industry

saw rapid growth in the mid-2000s Competition is based on

differentiation The largest sellers of alternative

beverages:Coca-Cola, PepsiCo., Red Bull GmbH,

and Monster Beverage Corporation

Current State of the Industry

Hit hard by the recent economic recession. The alternative beverage industry is

projected to grow at a rate of 5.88% on average.

Global companies are combatting the decline of soft drinks sales through alternative beverages.

Expansion and the Focus

Companies expanded the alternative beverage market through:Blue ocean strategiesExploiting international marketsCapitalizing on consumer trends

Innovation and Consumer Trends

An important factor for success in the alternative beverage industry is innovation.

Success based on capitalizing on consumer trends.

Beverage Industry Market Share (2009)

48.20%

29.20%

12.40%

4.00%

3.10%

1.60% 1.20%

0.30%

Carbonated soft drinks

Bottled Water

Fruit Beverages

Sports Drinks

Ready-to-Drink Tea

Flavored or Enhanced Water

Energy Drinks

Ready-to-Drink Coffee

Competitive Forces and Pressures The strongest

competitive force is rivalry among competing sellers.

The weakest force is competitive pressures from buyer bargaining power.

Energy Drink Industry by Market Share (2012)

Red Bull, 39.80%

Monster, Monster Energy, and Java Monster, 29.90%

Rockstar and Rockstar Recovery; 9.20%

Nos; 3.50%

Amp; 2.10% Full Throttle; 1.40%

Sports Drink Market Share (2012)

Gatorade Perform- 50%

Gatorade- 10.6%

Gatorade G2- 10.3%

Gatorade Cool Blue- 1.4%

Gatorade Frost- 1.4%

G2- 1.2%

Powerade Ion4- 16.2%

Powerade Zero- 4.5%

Powerade- 1.0%

Powerade Zero Ion4- .80%

Profit Margin

2012 2011 20100

5

10

15

20

25

30

35

40

45

Pepsi

Coca-Cola

Monster

Return on Equity

2012 2011 20100

10

20

30

40

50

60

Pepsi

Coca-Cola

Monster

Financial Structure

2012 2011 20100

0.2

0.4

0.6

0.8

1

1.2

1.4

Pepsi

Coca-Cola

Monster

*Based off Debt-to-Equity ratio

Liquidity

2012 2011 20100

1

2

3

4

5

6

Pepsi

Coca-Cola

Monster

*Based off Current Ratio

Inventory Turnover

2012 2011 20100

1

2

3

4

5

6

7

8

9

10

Pepsi

Coca-Cola

Monster

Earnings Per Share

2012 2011 2010 $-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

Pepsi

Coca-Cola

Monster

Concerns…

Legal factors

Changing consumer demand

Rival firms

Distribution/suppliers

Innovation

Discretionary Income

Recommendations…

Distribution/Suppliers

Strategic Alliances

Supply Chain

Management

Recommendations…

Innovation

Invest in R&D

Invest in Marketing

Recommendations…

Discretionary

Income

Increase price

competition

Product

Diversification

Thank you for your attention

Are there any questions…