INDUSTRY ANALYSIS

Non-alcoholic drinks refer to beverages, which have less than 0.5% alcoholic content by volume. Broadly includes soft drinks and hot drinks. Soft drinks contain
carbonated or non-carbonated water, a sweetener, and a flavor, and hot drinks include coffee and tea. The soft drink category dominates the industry.
The
global soft drink market is led by carbonated soft drinks (or CSDs), which had a market size of $337.8 billion in 2013. In the same year, CSDs were followed by
bottled water, with a market size of $189.1 billion, and juice, with a market size of $146.2 billion. The non-alcoholic beverage market is a highly competitive
industry that includes two behemoths The Coca-Cola Company (KO) and PepsiCo, Inc. (PEP). Collectively, these companies hold about 70% of the US CSD
market. Dr Pepper Snapple Group, Inc. (DPS), Monster Beverage Corporation (MNST), and Cott Corporation (COT) are some other key players in the CSD
market.
North America is the largest market for non-alcoholic drinks globally closely followed by Asia Pacific. The U.S. is one of the major markets for non-alcoholic
drinks in North America.
Non-Alcoholic Drinks Market in terms of revenue and volume is Expected to Reach USD 1,937.73 Billion and 1,289.03 Billion liters respectively in 2020. the
market was valued at USD 1,435.25 billion in 2013, which is expected to reach USD 1,937.73 billion by 2020, growing at a CAGR of 4.3% from 2014 to 2020. In
terms of volume, the global non-alcoholic drinks market was valued at 912.77 billion liters in 2013 and is expected 1289.03 billion liters by 2020, growing at a
CAGR of 4.9% from 2014 to 2020
GROWTH DRIVERS\; Changing customer needs and introduction of new flavors and product variants AND Increasing disposable income in emerging economies
are the major factors driving demand for non-alcoholic drinks globally .

Recent Pepsi and Coca-Cola deals

In 2014, The Coca-Cola Company (KO) announced a long-term partnership with Keurig Green Mountain, Inc. (GMCR). The deal will allow people to enjoy ice-cold
Coca-Cola beverages at home with the soon-to-be-released Keurig Cold machine.
In August 2014, Coca-Cola announced the purchase of a 16.7% stake in Monster Beverage Corporation (MNST). The $2.15 billion deal will help both companies
leverage their respective strengthsCoca-Colas bottling system and Monster Beverages position as a global energy player.
Under the terms of the partnership, Coca-Cola will transfer ownership of its energy business, including drinks such as Full Throttle, Burn, and Relentless, to
Monster Beverage. Monster Beverage will transfer its non-energy business, including drinks such as Hansens Natural Sodas, Peace Tea, Huberts Lemonade, and
Hansens Juice Products, to Coca-Cola.
In October 2014, PepsiCo, Inc. (PEP) and home carbonation maker Sodastream International entered into a short-term agreement to test a limited number of
PepsiCo flavors for SodaStream machines.

PORTERS FIVE FORCES ANALYSIS

1) Threats of entrance of the new enterprises Exist entry barriers in the non-alcoholic beverage industry, by fact these market imply highs fix and variable
costs the end of activity. Also it depends of governmental regulation of countries or regions where the firm is, because for example, the production, distribution
and sale are subject to numerous statutes and regulations outside of European Union and United States.
2) Rivalry among Existing Firms There is rivalry between the existing firms due to universe and to number of competitors. But there is rivalry between the firms
for case of products with similar characteristics like Pepsi-cola and Coca-cola, and by fact that the exit barriers are high.

3) Bargaining power of Buyers It is strong, because there are many firms in this industry; it is very easy to find other supplier in the industry.
4) Bargaining Power of Suppliers It is low, because there are many suppliers in this industry; there is substitute firms in the industry.