In the first half of the 1990s, domestic volume in the soft drink industry is projected to grow at the rate 4.5 percent per year. For the diet drinks, however, growth is projected in the 11.5 percent range, while growth of only 2.5 percent is projected for the regular, sugar flavored colas. Internation ally, growth projections for the industry are even stronger, with a 9.0 to 11.0 percent annual growth rate projected for the first half of the 1990s.
The increasing acceptance and popularity of diet soft drinks indicate that growth in per capita consumption of soft drinks will continue in the coming decade, in spite of significant demographic changes, because the diet soft drinks appeal to older consumers, as well as to teenagers.
The demographics of the American population are changing significantly. With respect to the soft drink industry, the most important changes are (1) the aging of the baby boom generation, which fueled the rapid growth of the industry in the 1960s and 1970s, and (2) the declining proportion of teenagers in the population, the age group the industry had hoped would fuel its growth in the 1980s and 1990s.
In 1990, six soft drink manufacturers account for more than four fifths of the total market. These six manufacturers are Coca Cola, Pepsico, Seven Up, Dr. Pepper, Crush and A&W Brands. Of these six companies, three Seven Up, Dr. Pepper, and Crush
are owned by either conglomerates or investment organizations whose principal lines of business are other than soft drinks and snack foods. The two industry leaders Coca Cola and Pepsico account for 70.5 percent of the domestic soft drink market 40.3 per cent for Coca Cola, and 30.2 percent for Pepsico.
There are two major threats to the soft drink industry in early 1990. First, there is the decline in the growth of the domestic market. Second, there is the demographic change, in which the teenaged population segment, traditionally the lar ...