Executive Summary

The soft drinks industry includes carbonated as well as the non-carbonated drinks. The industry leaders are Coca-Cola and Pepsi. This industry is unique in the sense that the product is bought primarily for the brand image of the company rather that the utility of the product. The purpose of a carbonated drink can well be served by a glass of water or lemonade. The companies strive to capture market share through extensive advertising and branding. The carbonated drinks were perceived as a health concern so the companies introduced non carbonated drinks like juices.

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The firms in this industry exercise tight control over the suppliers and compete on price to get customers. The industry is very competitive and makes it very difficult for a small player to exist. The bigger firms have an advantage due to economies of scale.

Introduction

Soft drink industry has been a successful growth for a long time. In recent years, the sales of basic soft drinks have been depreciated highly due to increment of health awareness, change in consumer behaviour towards other varieties of soft drinks etc. But all over the changes have been directed net positive increment in sales due affinity of consumers towards juice and bottled drinking and mineral water. The big players of original soft drinks like Coke, Pepsico etc. are acquiring or diversifying their products toward juice and mineral water industry. They are doing product extension as well (ex. Diet Pepsi, Coke Zero etc.) to remain competitive in the market.

The definition of classic soft drink can be expressed as follows:

Sometimes soft drink may contain alcohol but the within the limit of 0.5%.

The carbonated water is made in two ways. It is either using soda siphon or by home carbonation system. The latter one is made by putting dry ice on water. In modern industry, carbondioxide is used instead of dry ice. The carbondioxide is pressured and mixed with water with high pressure.