Company Strategies in Soft Drinks

Key Findings

A changing category landscape for beverages

Changing consumer preferences, new legislation and growing pressure from small challenger companies are all placing unprecedented pressure on major soft drinks companies to evolve their long-term strategies with regard to brand portfolios, ingredients recipes and future channels of consumption.

Packaged water takes over the soft drinks industry

Many of the top companies in soft drinks are finding new ways to quickly enter and assume control of healthier, added-value beverage categories, from functional water to unsweetened tea and craft RTD coffee. There is a renewed industry focus on opportunities to grow share and drive consumption outside of traditional retail channels, particularly in foodservice.

Looking both outside and within for innovation

Pressure from small brands (throughout the price spectrum) and growing mistrust of major food and beverage producers on the part of consumers are both contributing to a new approach to beverage innovation from MNCs, with a focus on small, scalable acquisitions/investments in unfamiliar category spaces, and the incubation of ‘internal startups’ via acceleration funding.

Major GBOs chart a new course with major acquisitions and mergers

2018 has been a year of major investment and consolidation within the soft drinks industry, with Coca-Cola acquiring a major chain of coffee shops, PepsiCo acquiring the SodaStream countertop appliance, and Keurig Dr Pepper creating the first union of a top five retail beverage producer with a single-serve coffee pod business. Nestlé assumes control of Starbucks retail hot drinks business, while Danone increases share in added-value hydration drinks.