Abstract
Since 2006, the soft drinks market has been "flourishing" thanks to two factors: rising disposable incomes and well-being. Consumer lifestyles are undergoing a major change due to a growing awareness of the link between diet and health. On the other side, enhanced living standards, especially in emerging markets, allow consumers more freedom in terms of product purchase, and consequently help in the market dynamics.
Many causes can be attributed to the profitability of the soft drink market. This market covers carbonates, fruit/vegetable juices, bottled water, functional drinks, concentrates, RTD tea, RTD coffee and Asian specialty drinks.
Bottled water overtook carbonates as the leading soft drinks sector by off-trade volume thanks to shifting attitudes to health in developed as well as emerging markets. Besides, consumers are now aware of the importance of hydration thanks to the rising temperatures caused by climate change. The mix of these two factors have prompted the manufacturers to double their efforts in positioning themselves profitably in an increasingly competitive marketplace.
Functional drinks represent the fastest growing sector of the soft drinks market, thanks to the strong trend towards healthier and busier lifestyles and convenience. Manufacturers are faced with the challenge of maintaining consumer interest in an increasingly competitive environment. Consequently, functional drinks have to focus on brand extensions for introducing new products which could target specific consumer demographics, and the development of "hybrid" drinks, which is a combination of functional drinks with other successful soft drink formats.
As for carbonates, even though they have a less than healthy image, they still represent a major force in the global soft drinks market. With the expanding focus on wellbeing, carbonates started "to witness the introduction of low-calorie and low-sugar products", as the manufacturers are trying to stimulate sales growth. Moreover, using fruit flavors and natural ingredients, or simply sparkling fruit juices are regarded as carbonate options.
Coca-Cola and PepsiCo were the world leaders of the "soft drinks" market for January 2000. John Pemberton created the Coca-Cola brand in 1886 in Atlanta whereas Caleb D. Bradham created Pepsi-Cola brand in 1898.
Owing to their strong reputation & the infatuation of their customers, their sales have increased dramatically and put them "under the spotlight". Ever since their creation, these two soda giants have been involved in a constant business war.
Both brands are synonymous with American culture worldwide and is present on a global scale thanks to company strategies which have been adapted to each different culture. Due to an increase in sponsorships and several horizontal acquisitions, they have acquired significant positions in their consumers' lifestyle.
