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
Recent Developments
Mar 6, 2023 - Growing Demand for Plant-Based Sweeteners
- As more consumers seek out reduced-sugar or sugar-free drinks, beverage makers are turning to natural, plant-based sweeteners such as stevia, erythritol, monk fruit and allulose to deliver their products without sacrificing taste, Beverage Industry reports. “Increasing awareness about sugar’s role in health conditions like diabetes and obesity as well as the rising popularity of diets such as keto and paleo are steering more consumers away from sugar,” says stevia and stevia-products maker Pyure Brands’ Jace Yawnick adding, “Sugar reduction has become a trend, one that we believe is here to stay.” While Americans are consuming less sugar, on average they still consume more sugar than is recommended, with beverages remaining a leading source of added sugars. “Beverage brands that incorporate more plant-based sweeteners are likely to find success with shoppers examining product labels,” says Sarah Diedrich, marketing director for global sweetening at ADM.
- Private brand sales hit a new record last year, jumping 11.3% to $228.6 billion in all outlets in the US for the 52 weeks ending January 1, 2023 versus the prior year, according to the Private Label Manufacturers Association’s (PLMA) 2023 Private Label Report. Store brands – which typically cost less than national brands – grew at nearly twice the rate of national brands, which were up 6.1% in dollar sales, according IRI Unify sales data. Grocery price inflation is driving sales and volume growth of private-label products. Of the 17 departments tracked by IRI, the fastest-growing segments are beverages, up 19% to $12 billion; deli prepared foods, up 17% to $5.9 billion; and refrigerated foods, up 17% to $47.4 billion, followed by liquor, general food, floral, bakery, produce, and deli meat, according to the report.
- High food inflation is forecast to persist in 2023, Successful Farming reported in January. The 9.9% food inflation rate of 2022 will be followed by a 7.1% rate this year, the highest rates in three decades, according to USDA economists. Grocery prices are expected to rise by 8% this year, according to the USDA. In 2023, prices for nonalcoholic beverages are predicted to increase by 8.7%, versus 11% in 2022.
- Dr Pepper is gaining ground on its rivals, even as the overall soda market loses its fizz, CNN Business reported in December 2022. Dr Pepper soda grew its dollar share by 9% from 2003 to 2021, compared to a 26% drop in the carbonated soft drinks category overall, according to Keurig Dr Pepper (KDP), citing IRI and the Beverage Digest Factbook. Currently, Dr Pepper is the fourth most popular soda in the country after Coke, Pepsi, and Mountain Dew. By volume, Coca-Cola controlled about 40% of the US retail market in the first nine months of 2022, followed by PepsiCo, and KDP, according to Beverage Digest data. Compared to 2021, PepsiCo’s share fell by 1%, while Keurig Dr Pepper’s rose.
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