Soft Drink Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 375 soft drink manufacturers in the US produce carbonated and non-carbonated beverages. Major flavor groups include cola, heavy citrus, lemon-lime, pepper, orange, and root beer. The category also includes regular (or full-calorie), diet, and seltzer beverages. Firms may also produce bottled water; sports drinks; energy drinks; juice, dairy, or plant-based beverages; and tea and coffee drinks.
Carbonated Market Stems Decline
The carbonated soft drink (CSD) market is mature, with health-conscious consumers turning to more wholesome options including bottled water.
Capital-Intensive Operations
Soft drink manufacturing is a volume-driven business that is heavily reliant on sophisticated production facilities.
Industry size & Structure
The average soft drink manufacturer employs about 217 workers and generates about $97 million annually.
- The soft drink manufacturing industry consists of about 375 firms that employ about 81,200 workers and generate $36.5 billion annually.
- The industry is highly concentrated; the top 50 companies account for 92% of industry revenue.
- Large firms, including Coca-Cola, PepsiCo, and Dr Pepper/Snapple, have international operations and own brands with a global presence.
Industry Forecast
Soft Drink Manufacturers Industry Growth
Recent Developments
Jun 21, 2024 - Shipments and Prices Are Rising
- Beverage shipments rose 3.5% in March compared to a year ago and were up 3% versus February, according to the latest US Bureau of Labor Statistics data. Meanwhile, the producer price index for soft drink manufacturers, which measures prices before reaching consumers, rose 6.3% compared to a year ago and a new high despite falling beverage industry sales. Double-digit price hikes by soft drink manufacturers, including Coca-Cola, are more than compensating for flat sales. Employment by soft drink manufacturers grew 0.9% in April year over year, per the BLS.
- Dr Pepper has overtaken Pepsi to become the second most popular soda brand in the US behind Coca-Cola, the Food Institute reported in June. Recent data from Beverage Digest shows that although the two brands have been competing for second place for decades, Dr Pepper’s promotion to the no. 2 spot follows a slow but steady rise since almost the turn of the millennium. Huge investments by the Texas-based company in marketing, novel flavors, and a distribution model that sees Dr Pepper dispensed from more soda fountains than any other soft drink are credited for the 139-year-old brand’s rise in popularity. The Dr Pepper brand is growing fastest among Gen Z consumers seeking alternatives to traditional cola drinks. Dr Pepper’s rise demoted Pepsi to third place in market share, followed by Sprite and Diet Coke.
- Fed up with steeply rising prices for soft drinks, US consumers bought hundreds of millions fewer cans, bottles, and fountain drinks last year, The Daily Mail reports. Soft drink giant Coca-Cola raised the price of its drinks by around 10% in 2023, which, while boosting dollar sales, resulted in shrinking volumes. In North America, the company’s biggest market, a long succession of price hikes has coincided with sales volume falling 1% in 2023. In an earnings call with investors, Coca-Cola CEO James Quincey said that in North America, the company was starting to feel the impact of high prices and would moderate them in response. According to Daily Mail, Pepsi drinkers are also rebelling against high prices, with revenue falling in its latest quarter for the first time in 14 quarters.
- Sales of soft drinks and other sugar-sweetened beverages (SSB) plunged in cities where those beverages are taxed, Food Dive reports citing research published in JAMA Health Forum. Researchers studied five cities – Boulder, Co.; Philadelphia; Oakland; Seattle; and San Francisco – and found that prices rose and volume sales fell immediately after the tax was imposed, and both outcomes were sustained in the months after. The decline in consumer purchase volumes was about equal (down by a third) to the 33.1% increase in the price of SSB, per the research. The American Beverage Association, which represents soft drink makers, said in a statement that the industry’s strategy of offering more choices with less sugar, smaller portions, and clear calorie information is working and that the taxes failed to meaningfully improve public health or reduce calories. As of November 2022, eight US jurisdictions and 50-plus countries had imposed some form of sugar-sweetened tax.
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