What You Need to Know in the Beverage Industry
Over the past few days, some headlines about Green Mountain Coffee Roasters , Starbucks , Coca-Cola Femsa , Coca-Cola "Hellenic" , and PepsiCo came across the web to shed light on their overall direction. These companies want to satisfy an increasingly health conscious consumer and expand into new territories. Also, their ubiquity helps them maintain a competitive edge over smaller rivals.
A move into the single-serve coffee cup market
According to Restaurant News, Panera is now selling its branded single serve coffee cups in four different flavors; "dark roast, light roast, Colombia, and Hazelnut Crème". Taking note of Starbucks successful relationship with Green Mountain Coffee Roasters and Starbucks' entrenchment into the grocery store chains Panera decided to move into the single serve space. Now you don't need to go to Panera to enjoy its coffee.
In a more interesting partnership, according to an article in USA Today, Starbucks teamed up with Switzerland's national railroad, Swiss Federal Railways, building a store on a train car. The train car sports two levels with the outside decked out with the Starbucks' logo. Starbucks wants to research how well its stores will do on trains.
Coca-Cola bottlers expand
Coca-Cola's largest publicly traded bottler Coca-Cola FEMSA recently invested $28 million in a warehouse facility in the Philippines, according to Drinks Business Review. Coca-Cola FEMSA's executives said this allows the company the logistical flexibility to expand as demand in the country increases. On the Eastern European front, an analyst sees Coca-Cola HBC AG more, commonly known as Coca-Cola Hellenic, expanding due to low levels of consumption per capita in developing and emerging markets, according to Beverage Daily. The article noted that customers in developing markets are starting to adopt branded beverages. It's also noteworthy that customers even in developing markets gravitate toward healthier drinks such as water and juice. Moreover, Russia's crackdown on beer consumption bodes well for the non-alcoholic industry according to the analyst. It's interesting to think that parts of the world still have yet to enjoy Coca-Cola's taste.
An article in Bakery and Snacks highlighted PepsiCo's ubiquity, marketing might, and brand management as a serious competitive edge. PepsiCo demonstrates expertise in cross-marketing and understands the demand patterns of its consumer. PepsiCo's snacks and beverage brands represent some of the most recognized in the world. An analyst cited in the article gave this example, "Consumers rarely buy Doritos without a dip". PepsiCo utilizes its resources to stay on trend so it can adapt. Lay's, Doritos, and Cheetos hold the top three positions in "Global Brand Share" according to Bakery and Snacks. Its global distribution infrastructure allows the company the economies of scale to profitably sell at a lower price.
The key to future shareholder expansion lies in remaining dynamic, flexible, and innovative. Finding new products, initiating new business relationships, and maintaining financial strength serve as keys to enhancing shareholder wealth over the long-term.
Editor's note: A previous version of this article inaccurately stated the Panera Bread formed a partnership with Green Mountain Coffee Roasters. The Fool apologizes for this mistake.
The article What You Need to Know in the Beverage Industry originally appeared on Fool.com.
William Bias owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola, Green Mountain Coffee Roasters, PepsiCo, and Starbucks. The Motley Fool owns shares of Coca-Cola, PepsiCo, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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