Information-Industry Analysis

The soft drink industry is made up of all businesses that create and sell various soft drink

products. Carbonated soft drinks include drinks comprised of water, sugar, or a type of artificial

sweetener, and a flavoring agent that have had carbon dioxide infused in them to make them

effervescent. Carbonated soft drinks are commonly referred to as soda, pop, or carbonated

beverages. The drinks are commonly available in regular and diet varieties (Conway). The top 5

companies in the soft drink industry include Coca-Cola, PepsiCo, Dr. Pepper, Refreshco, and

National Beverage in that order (David).

Coca-Cola’s main product line is its Coca-Cola® Original carbonated soft drink. In the

soft drink industry, the market share of Coca-Cola, PepsiCo, Dr. Pepper, Refreshco, National

Beverage, and others for the year 2018 were 43.3%, 24.9%, 17.9%, 3.6%, 3.1%, and 7.2%

respectively (David). Coca-Cola® Original’s major competitors in America include Pepsi and

Dr. Pepper. The strongest competitor of Coca-Cola® Original is Pepsi, the famous rivalry is

known as the Cola Wars. Pepsi’s Net revenue in 2017 was 63.5 Billion Dollars, and it had a

Gross Profit of 28.8 Billion dollars compared to Coca-Cola’s Net Operating Revenue of 35.41

Billion dollars and Gross Profit of 22.15 Billion USD. Dr. Pepper Snapple’s 2017 revenue was

6.4 billion dollars (90% was earned from the US market) (Pratap).

Coca-Cola Company
According to an article published by Sanger-Katz in the New York Times “Over the last

20 years, sales of full-calorie soda in the United States have plummeted by more than 25 percent.

Soda consumption, which rocketed from the 1960s through 1990s, is now experiencing a serious
(NYSE: KO)
and sustained decline” (Sanger-Katz). This information shows how severe the decline of the soft

drink industry has been over the past decades. Sales are declining because of the growing

George Moses Prof. Hyland, MGT 101

 Moses 1

number of Americans' rising health concerns regarding the sugar content of soft drinks and

health issues associated with it.

PESTEL Analysis

Coca-Cola is heavily reliant on state and government regulations on caffeine and sugar in

beverages. With policymakers becoming sterner about this issue due to the growing number of

obesity and heart disease cases, Coca-Cola may be forced to alter the chemical components in

their drinks (which can totally change the taste of their products) (Farooq).

According to a report published by macrotrends.com, Coca-Cola has had tremendous

growth in 2018 and 2019 of 415.54% and 38.64% respectively. But the shutdown of businesses

because of the covid-19 pandemic, the annual revenue and net income of the company has

decreased by 8.74% and 7.55%. Also, the retail value of Coca Cola’s products like Sugar Zero

and Diet Coke increased by approximately 8% in 2018 as consumers are becoming more health-

conscious (Shaw).

Obesity and being overweight are two major health issues across the world. As a

result of this, Coca-Cola has introduced low calorie and less sugary carbonated soft drinks such

as Coke Zero and Diet Coke to combat the matter. Also, the company plans to introduce many

other diet products in the future to target the health-conscious market (Shaw).

New developments in technology such as AI bases analytics and big data

operations have aided Coca-Cola in deciding market trends and service chain management

processes to help cut costs and increase its target market and production base (Farooq).

Coca-Cola has encountered criticism for pollution and completely

draining off groundwater in areas in India. Coca-Cola has also been reported as the largest

consumer of fresh water in the world. However, it has taken steps to resolve these issues and
 Moses 2

reduce its carbon footprint. It has also begun to use water-smart farming systems like RAIN and

CARE which uses as little water as possible (Shaw).

Coca-Cola has encountered difficulties due to the quantity of

caffeine in its products in various countries in the past. The company was also accused of paying

low wages and has alleged lawsuits against racial discrimination against its employees which has

resulted in a number of protests from labor unions (Shaw).

 Moses 3

Graphical Representation of Information

2018 Soft Drink Industry Market

Coca-Cola
7% PepsiCo
3%
4% Dr. Pepper
Refreshco
18% 43%
National Beverage
Others

25%

Beverage Consumption in the US from 1985 to 2014

 Moses 4

Analysis of the Information

Based on the information presented, in the short run, Coca-Cola will continue to face a

decline in sales in its main product, Coca-Cola® Original, and company sales as a whole. This is

due to the Coronavirus pandemic shutting down businesses, parties, and other events where soft

drinks are commonly bought and consumed. Also, this decline will be as a result of the change in

habits of consumers from sugar-packed sodas such as Coca-Cola’s flagship product, Coca-Cola®

Original to healthier alternatives such as water and sodas with a low sugar content like Diet

Coke.

Based on the information presented, in the long run, Coca-Cola’s revenue and

profitability will grow due to several reasons. Firstly, due to Coca-Cola’s technological

advancements in AI bases analytics and big data operations to reduce costs and target particular

market segments. Secondly, after the coronavirus, stores will begin to open back up and more

events will be held causing the demand for soft drinks to rise again. Thirdly, Coca-Cola’s shift to

producing higher quantities of low-calorie healthier alternatives to their Coca-Cola® Original

soft drink such as Diet Coke and Coke zero will contribute significantly to their growth in future

sales as consumers have become more health-conscious. And this move to producing healthier

products will also put the company in better standing with new government regulations on sugar

levels in beverages. However, as government and state policies cause the company to change the

caffeine and sugar levels in their products, failure to maintain the same quality and taste of the

Coca-Cola® Original could prove to be detrimental to the company’s future growth and success.

Also, the company’s step toward becoming more eco-friendly in their production

processes will gain them favor with consumers and the media which will be good for the brand.
 Moses 5

Works-Cited

Conway, Jan. “Soft Drink Market Share in the U.S. 2018.” Statista, 26 Nov. 2020,

www.statista.com/statistics/225464/market-share-of-leading-soft-drink-companies-in-the-

us-since-2004/.

David, Joe. “Competitors of Coca-Cola (Competitor Analysis).” Howandwhat, 7 Dec. 2019,

howandwhat.net/competitors-coca-cola/.

Farooq, Umar. “Pestle Analysis of Coca Cola.” Marketing Tutor, 14 July 2019,

www.marketingtutor.net/pestle-analysis-of-coca-cola/.

Pratap, Abhijeet. “Who Are the Competitors of Coca Cola Company?” Notesmatic, 10 Oct.

2018, notesmatic.com/competitors-of-coca-cola-company/.

Sanger-Katz, Margot. “The Decline of 'Big Soda'.” The New York Times, The New York Times,

2 Oct. 2015, www.nytimes.com/2015/10/04/upshot/soda-industry-struggles-as-consumer-

tastes-change.html.

Shaw, Ahsan Ali. “PESTLE Analysis of Coca Cola.” SWOT & PESTLE Analysis, 9 Dec. 2020,

swotandpestleanalysis.com/pestle-analysis-of-coca-cola/.