The Drinks Market

The Drinks Market

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The Drinks Market


The drinks market is one of the most valuable consumer markets of
today. The market for all types of drinks bought by UK consumers was
worth an estimated £46.55bn in 2002. Drinks (and food) are the two
main human necessities and therefore companies in the market are
making heaps of money and simultaneously expanding the range of
products available to the consumer. This is why so many companies are
investing in expanding their product range into this area. Many
companies that you would not necessarily associate with the drinks
market have put products on the shelves for the consumer. It is also a
market which has a reputation for being very dependent on marketing
and the advertising of the actual products.

MAIN TYPES OF DRINKS CONSUMED:




These are the main types of drinks that are consumed on a daily basis:

NON-ALCOHOLIC:

· Fruit juices and hybrid drinks

· Dairy Drinks

· Carbonated Soft Drinks

· Energy Drinks

· Mineral Water

· Hot Drinks

ALCOHOLIC:

· Beer, Lager And Cider

· Shand and Lager Mixers

· Wine

· Martini And Sherry

· Spirits (E.G. Whisky, Vodka, Gin) And Liqueurs

· Alcopops (E.G. Hooch, Two Dogs Etc.) Or Pre-Mixed Alcoholic Drinks
(E.G. Bacardi Breezer, Metz, Smirnoff Ice, V2 Etc.)

GENERAL MARKET TRENDS:

· Since 1995 there has been a decline in the consumption of milk, milk
drinks and hot drinks like tea and coffee, although this category
still represents 40% of total beverage consumption.

· Total alcoholic beverage consumption is also decreasing.

· The most striking data refer to soft drinks consumption, which is
increasing rapidly.

· The projections for 2005 include a further decline in milk and hot
drinks (by 1% and 2% respectively) and a 3% increase in soft drinks to
30% of the market share. Alcohol is likely to remain stable at 17%.

· Recently, the UK market has seen an emergence of innovative energy

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and functional drinks marketed in a highly sophisticated manner,
targeting specific groups of consumers.

· Wine showing the fastest growth.

· Growth in soft drinks led by energy products and water.

· Lager sales driving the beer market.

· Sales of spirits benefiting from premiumisation but penetration
levels are falling.

· Image is everything.

· Beer remains the highest spending category.

· Hot beverages buck the trend.

· The Internet is playing an increasing role.

· A shrinking consumer base for alcohol.

WHERE ARE MOST DRINKS SOLD?


VENDING MACHINES:

[IMAGE]


Nowadays, we can find a lot of vending machines almost anywhere. The
place is they can be found in front of buildings, shops, entertainment
facilities, and even in residential areas. Why are there so many
vending machines all over Britain? There are many kind of drinks sold
on vending machines. We can have a variety of choices for drinks. Of
course, vending machines are convenient. We can get drinks any
time,anywhere. But, the prices of the drinks sold on vending machines
are usually higher than those at stores.

It was an early policy of the Coca- Cola company to make their product
readily available to everyone all the time and they have certainly
stuck to this as in London, a survey in 2002 showed that there was a
vending machine containing Coke, on average, every 300m².

SHOPS AND RETAIL OUTLETS:

Of course, you can still buy drinks in almost every shop on the
street, and this has led to a massive boom in the Soft- Drinks Market.
Where as 30 years ago, drinks were only availible in Supermarkets and
other mass- retailers, soft- drinks, and in some cases, alcoholic
drinks, can now be purchased in newsagents, pharmacies, general stores
and around 90% of all shops.

PUBS AND LICENSED OUTLETS:

Despite the boom in vending machine sales and the enhanced
availability of drinks in high street shops, pubs and licensed outlets
are still just as popular as ever:

While the demand for drinks is obviously a natural human need, it is
also maintained by the numerous outlets available, which can be
divided between take-home, the on-trade and other catering outlets.

Over 70% of the alcoholic drinks market value goes through the
on-trade, covering pubs, restaurants and bars. While volumes have
shifted towards take-home, or the off-trade, the market value remains
biased towards `drinking out', largely due to price differences. In
contrast to price wars on bulk purchasing in supermarkets - including
ever larger take-home packs and two-for-the-price-of-one deals, etc. -
are the rising prices charged in the UK's thousands of modernised pubs
and bars.

The on-trade is still dominated by traditional pubs, but a large
proportion of these have reinvented themselves as `food pubs', or they
target either families or young drinkers. Fast-food outlets and coffee
shops are important for the soft and hot drinks markets, and many
other drinks outlets are situated in the leisure sector (including in
sports clubs, nightclubs, shopping malls and cinemas, etc.).

The traditional off licences and wine merchants have struggled against
the powerful multiple grocers as outlets for take-home drinks. There
are only a few national multiples of significance, including First
Quench, Oddbins and Majestic Wine Warehouses.

This diverse range of drinks outlets is supported by the numerous
occasions on which it is seen by consumers to be appropriate to enjoy
an alcoholic drink. Key Note's consumer usage opinion survey in 2002
found that the overall leading occasion was Christmas and New Year,
but there are many other times when consumers enjoy a drink.

WHO ARE THE MAIN DRINKS MANUFACTURERS?


Here is a list of the major drinks manufacturers of drinks from the
year 2002. They were selected on the basis of over £500,000 profit
from sales in 2002:

According to a recent survey conducted by Mintel.com, these thirty
drinks manufacturers are the market leaders in producing and selling
soft Drinks.

· Belvoir Fruit Farms

· Beverage Brands

· Bottle Green Drinks Company

· Britvic Soft Drinks

· Cadbury Schweppes

· Coca Cola Enterprises

· Cott Beverages

· Danone

· WatersElla Drinks

· G Costa

· Glaxo Smith-Kline

· Hall & Woodhouse

· Matthew Clark

· BrandMerrydown plc

· Nestlé

· Novartis

· Consumer Health

· Pago Fruit Juices

· Pernod Brands

· Perrier

· Vittel

· UKPrince's Soft Drinks

· The Silverspring Mineral Water Co.

· South African Breweries

· T&T Beverages

· Thorncroft

· Tropicana

· Twinings

· Van den Bergh Foods

· Villa Soft Drinks

· Well Well Well

Although most normal people may have only heard of a few of the names
above, these companies are supplying all the supermarkets and other
brands with their products, even if they are not as recognised,
perhaps, as the brands that they sell to. Some brands however, do
produce their own products. The Coca- Cola company for example
manufactures, markets and sells popular soft drinks such as Fanta,
Sprite and Coca-Cola by itself. Its what we in the business call 'a
self- sufficient' manufacturer.

The barriers to entry are quite low for manufacturing and distributing
many drinks. However, the ease of developing economies of scale for
branded drinks means that the supply side is increasingly concentrated
among large multinational or national manufacturers.

Brewing was traditionally a regionally fragmented industry, but
national consolidation has been followed by globalisation. Mergers and
acquisitions in the 10 years to 2002 gave four companies a dominant
position in this, the largest of the drinks sectors. These leading
companies are: Scottish & Newcastle, now easily the largest indigenous
UK brewer, but also (since 2000) a major force across European
brewing; Interbrew SA, the Belgian company behind Stella Artois, the
leading beer in the UK; Coors Brewers Ltd, the US company that
acquired much of the Bass empire in 2001; and Carlsberg-Tetley Brewing
Ltd, the UK subsidiary of the global giant based in Denmark.

Spirits production used to be closely linked to brewing but the trend
has been towards specialisation. The two UK leaders in the spirits,
liqueurs and fortified wine sector are also the global leaders. Diageo
PLC, through its Guinness UDV division, is the major player in the
spirits market, as well as being an international brewer, with global
brands including Johnnie Walker Scotch whisky, Smirnoff vodka,
Gordon's gin, and Bailey's Irish Cream liqueur. Allied Domecq has
particular strengths in dark spirits, liqueurs and fortified wine.
Both Diageo and Allied Domecq are expanding their wine interests
globally.

Bacardi-Martini is another global force, represented in the UK by its
famous white rum. It is also a leader in the FABs sector, with Bacardi
Breezer, which is pitched against Diageo's Smirnoff Ice for market
leadership.

Cider typifies the market consolidation in traditional drinks. Two
companies, HP Bulmer and Matthew Clark Brands, account for over 90% of
the UK market.

WHAT ARE THE MAJOR BRANDS?




In this section I will list the major brands. A manufacturer is a
company, which produces and packages a product to either sell
independently or sell to another company who sells them on. A brand is
just the name a product is sold under. So here it is, the list of the
major brands selling soft drinks:

· Coca- Cola

· Nestle

· Tetley Tea

· Schweppes

· Budweiser

· Starbucks…apparently

· Various divisions of Omnicorp. ltd

A brands survey by Key Note in 2001 found that 62% of adults drink
Nescafé, 54% drink Coca-Cola, 43% drink Robinson's (fruit drinks), and
38% drink Tetley Tea. This illustrates the market balance between
international brands, such as Nescafé, and domestic favourites, such
as Tetley.

Soft and hot drinks are also globalised markets, and have been for
many decades. Coca-Cola is the world's leading consumer brand and the
company behind it dominates the UK soft drinks market, also producing
many top brands in fruit carbonates (e.g. Fanta), juices and bottled
water. Second to Coca-Cola is Britvic Soft Drinks Ltd, principally due
to its distribution of the Pepsi range, but also a producer of many
top domestic brands, such as Robinson's and Tango. The main
competitors in hot drinks are giant consumer goods manufacturers,
including Unilever, Nestlé and Kraft.

BRAND THEORIES, MARKET SEGMENTING, TARGETING AND ADVERTISEMENTS:




I will now choose a few well known drinks brands and analyse their
advertising campaigns, corporate identity and target markets:

BUDWEISER:

SLOGAN: "KING OF BEERS"

CURRENT ADVERTISING SLOGAN: "THINK FRESH, DRINK FRESH"

I think that by using these two slogans as the front of the Budweiser
advertising campaign, the company is portraying the image of Budweiser
being a high- quality beer, but is available to everyone. This is a
very clever media cover, as it appeals to all classes of people and
fools them into believing that they are of a higher class than they
may actually be, and presenting the product as fresh and the best of
the best. Budweiser have also moved their recent campaigns in the
direction of becoming an all-round corporation, rather than just a
beer company. This adds to the appeal of the product.

[IMAGE]


[IMAGE]

A Party. According to Budweiser?

Here is what us beer- boffins, like to call: the Budweiser
tasteometer:

[IMAGE]




[IMAGE]

And there you have it. Straight from the people at Budweiser, and not
by me that's for sure. Anywho, Budweiser has become one of the biggest
corporations in the world and not just because of its product, but
also because of the hugely valuable corporate image it has carved for
itself. Furthermore, they make some damn-fine beer.

CONCLUSION:




All drinks have some of marketing program behind them. It is possible
to work out which of these has been the most successful, by studying
the sales of various brands. I hope that in this project I have
outlined the main competitors in the market and given some information
about how each product is promoted, sold and received by the public.

I leave you with this thought: Do aliens drink beer? According to this
one, they do.
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