The soft drink industry sees trouble

Tom Dougherty, CEO – Stealing Share

23 December 2016

The soft drink industry must wake up to a new reality.

You see, there are all kinds of business trends that are transforming industries. We’ve already seen what our smartphones have replaced. Streaming media has made CDs and DVDs obsolete. And, as we’ve written extensively, cold breakfast cereal is in its own mess.

The failure to recognize what’s going on and building your brand to respond to market forces will leave you in the dust. Retailers are flat-out ignorant of enacting true change to adapt to a new reality, which includes dead malls.

Soft drink industry

Soft drinks could go the way of malls.

Promising, huh?

The soft drink industry is also experiencing massive change. Bottled water has replaced many of our sugar-infested soda drinking habits, with soda sales dropping 1.5% in 2015. The industry itself is responding with ads saying its players will reduce the amount of sugar and offer smaller sizes.

“The failure to recognize what’s going on and building your brand to respond to market forces will leave you in the dust.”

This is, of course, the equivalent of the tobacco industry saying it will have light cigarettes with less tar in them. The industry itself knows that it has a problem, but is trying to stem the tide of consumers leaving it.

However, the soft drink industry is also responding by diversifying their portfolios. The epitome of irony is that those soft drink companies now own most of the most recognizable bottled water brands.

soft drink industry

Coca-Cola will be fine.

It’s the rest who are in trouble.

How the soft drink industry can survive.

If I were to make a prediction, I’d say Coca-Cola has the best chance of surviving for one simple reason. It’s the only one with a meaningful and preferred brand. Pepsi once held a direct position against Coke by being about youth, while Coca-Cola was about nostalgia.

Since those heydays, however, Pepsi has been all over the map and must consider a new direction. Today’s youth are veering away from soft drinks. (A 19-year-old son of a co-worker has never sipped a soda in his life.) Capturing the imagination of Millennials is important, but that means all the players need a different strategy. Not just thumb plugging a hole in the dam.

Even Coke’s recent announcement of a selfie bottle won’t do the trick. It’s a gimmick. Big whoop.

repositioning is in order for all the players. Otherwise, it demonstrates another industry failing to respond to trends in a meaningful manner.

See more posts in the following related categories: Bottled water Coca-Cola Pepsi rebranding Sodas Sugar drinks

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