We had a cola plant manager as MBA student this year and we had friendly banter : on aspartame and HFCS content of the their cola drink. The handwriting is on the wall; PESTEL (external environment) is hard at work. Some of his classmate even kidded him that they should shift their business to household cleaners. As the drink is rich in phosphoric acid, it can make good cleaner., according to one classmate Hahaha
Softdrinks sales is on the decline for nine years now!
But Coca Cola spends heavily on billboards, sales efforts, trucks, sales personnel. And their execs are beating the hell out of their people
Do not take my word for it. You take Fortune CNN Money as authority? Please read
FORTUNE -- Soft-drink sales have been declining for nine straight
years. This is much more than a trend -- it's a fundamental shift in
consumer tastes that poses a major problem for soda makers, no matter
how diversified their product portfolios might be.
The latest numbers are astonishing, but not surprising. Sales of soda
fell 3% by volume in 2013, to the lowest levels since 1995, according
to a report from Beverage Digest issued on Monday.
That would be a big drop no matter what, but it's also more than double
2012's decline. People are moving away from soda at an accelerating
rate.
At this point, companies like Coca-Cola (KO) and Pepsico (PEP)
must be judged not on what they're doing to save their flagship brands,
but on how well they're managing those brands' decline. Of course
that's not easy for companies that are named for those very brands, so
they're still going nuts trying to figure out how to at least staunch
the losses, even as they wisely continue to invest in alternatives like
energy drinks, sports drinks, and flavored water.
MORE: M&M's newest flavor: Birthday cake?
Among many other initiatives, Pepsico tried a new bottle design for
Pepsi, and it signed Beyoncé to a $50 million endorsement deal. Coke
hired clothier Marc Jacobs as its "creative director." Sales have
continued to plummet.
And the hoped-for savior of the business -- diet drinks with
artificial sweeteners -- are no help. Up until a few years ago, sales of
diet sodas were falling at about the same rate as the sugar-filled
ones. Now they're actually falling faster as consumers continue to hear about health concerns. Just yesterday, a study was released indicating that consumption of diet soda can increase the risk of cardiovascular disease in older women.
But health concerns are not the only problem. If they were, it would
seem unlikely that energy drinks, sports beverages, coffee-based
beverages, and flavored waters would be taking up the slack. But they
are. That's a further indication that what's doing soda in is the
proliferation of choices in the beverage aisle, especially those aimed
at young people, an increasing number of whom think of Coke, Dr. Pepper,
Sprite, and Pepsi -- Beyoncé notwithstanding -- as the stuff their
grandparents drank in the olden days.
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