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 340 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. Firm may also produce bottled water; sports drinks; energy drinks; juice, dairy or plant-based beverages; and tea and coffee drinks.

Capital-Intensive Operations

Soft drink manufacturing is a volume-driven business that is heavily reliant on sophisticated production facilities.

Carbonated Market Decline

The carbonated soft drink (CSD) market is mature and declining, with health-conscious consumers turning to more wholesome options.

Industry size & Structure

The average soft drink manufacturer employs about 237 workers and generates about $110 million annually.

    • The soft drink manufacturing industry consists of about 340 firms that employ about 80,600 workers and generate $37 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
                                    Source: Vertical IQ and Inforum

                                    Recent Developments

                                    Nov 3, 2022 - Prices and Corporate Profits Soar
                                    • Soft drinks manufacturers are among the food and drinks companies that have hiked prices to cover rising costs only to see their profits rise even more. Earnings calls in October revealed that PepsiCo, whose prices for sodas and chips were up 17% in the latest quarter from year-earlier levels, reported that its third-quarter profit grew more than 20%, while rival Coca-Cola reported its profit rose 14% from a year earlier, due largely to price increases, The New York Times reported in November. In a break with the past, when companies generally increased prices incrementally to avoid scaring consumers and risk having them trade down to cheaper brands, companies aren’t shying away from passing along rising input costs to consumers. Some companies, however, are continuing to raise prices even if their own inflation-driven costs have been covered, NYTs reports.
                                    • Soft drink giants Dr Pepper, PepsiCo, and Coca-Cola have recently dropped limited-edition beverages. In October 2022, Dr Pepper introduced non-alcoholic Dr Pepper Bourbon Flavored Fansville Reserve to build its connection to college football fans. PepsiCo, in September, launched the Pepsi S’mores Collection, a limited-release beverage to be awarded to 2,00 fans through a sweepstakes. The bonfire-inspired Pepsi flavors are Toasted Marshmallow, Graham Cracker, and Chocolate and are designed to be mixed together. Coca-Cola in August launched the fourth in its Coca-Cola Creations line of limited-edition flavors for 2022 called Coke Dreamworld. Limited-edition flavors and soda bottles allow brands to generate consumer excitement and engagement while trying out new beverage concepts.
                                    • In concert with President Biden’s plan to end hunger in the US by 2030, the National Restaurant Association (NRA) said in September 2022 it will work with fast-food chains to ensure that children’s meals contain water, milk or juice instead of soda. The NRA will expand the voluntary Kids Live Well program to 45,000 more restaurants and create educational resources for restaurants to support healthier food options. The program focuses on helping restaurants offer more healthful kids' meal options that meet certain guidelines on sugar, sodium, fats and calories, as well as a requirement that kids' meals not include soda. Restaurant chains such as Subway, Burger King, and Chipotle have already joined the program, and new participants include Applebee’s, Denny’s, Outback Steakhouse, and Panda Express.
                                    • US retail prices for carbonated soft drinks (CSD) rose sharply in the first half of 2022, jumping more than 13%, Beverage Digest (BD) reported in August. Moreover, the double-digit rise in pricing was before pricing increases that were added in August by Coca-Cola and Keurig Dr Pepper. Data from BD shows that Coca-Cola led the category on pricing growth at almost 15%, followed by PepsiCo and Keurig Dr Pepper at about 12%. Coca-Cola and Keurig Dr Pepper brands held up under the higher pricing, with both adding volume and dollar share, while PepsiCo’s category share by both measures declined by more than 1 point. Although CSD consumers continued to spend on 12-oz cans at a rate that outpaced the category, they purchased fewer 2-liter bottles during the first half of this year at retail, according to BD.
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