Leading global beverage

A recent report by the leading global beverage sales tracker, Beverage Digest, validates it further. According to the report, the market of carbonated drinks fell by 0.6% in 2006 as against a drop of 0.2% in 2005. Seems insignificant, but if energy drinks are kept aside, the decline is a shocking 150% more than last year. Now, there’s the real trouble. Well, one could blame it on the pesticides controversy or on the rising health consciousness across the globe, the consumer verdict even in India is definitely proving detrimental for fizzy drink makers including Coca Cola. With the health drinks category growing globally at 2.8% per annum, not far in the future, the only options left for Coca-Cola (in fact, for all the other cola makers too) would be to make existing products healthier; and of course, diversify. No doubt, Coca Cola has been bolstering its growth strategy with a host of relatively healthier options for quite some time now. And, India doesn’t seem to be an exception to these attempts as well. With the recent launches of Cadbury- Schweppes water and Minute Maid, its pulpy orange juice, the company has clearly indicated a shift towards sports drinks, juices, energy drinks and water. But a look at PepsiCo’s classic foresight and Coke’s strategic defence seems too vulnerable. Some 60% of PepsiCo’s profits come from its snacks and food business. Right from Fritos to Lays to Cracker Jacks and Tostitos, PepsiCo enjoys a virtual monopoly, with Coca Cola nowhere in the scene – the reason why PepsiCo’s net profits have been steadily climbing upwards. On the contrary, Coca Cola’s overdependence on the beverage segment has surely proved detrimental to its bottom-
line, both globally and within India. In such a scenario, though the ‘Drops of Joy’ concept seems emotionally pliable, the fact is that standing alone, it won’t be capable of bringing joy to Coke’s life. CSR or no CSR, if the ‘Real Thing’ doesn’t diversify into health segments, it won’t be long before ‘Drops of Joy’ for Coke are transliterated fatally and sadly into ‘Teardrops of Joy’.


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Source : IIPM Editorial, 2008 ,An IIPM and Professor Arindam Chaudhuri (Renowned Management Guru and Economist) Initiative