Why The Soft Drink Industry Is Dominated By Coke And Pepsi

A rivalry for the ages

The business of Coca-Cola and PepsiCo has dominated the soft drinks industry for ages. Coca-Cola is the largest beverage company in the world in non-alcohol with more than 500 brands, including 17 brands that produce any income of 1 billion dollars. 

PepsiCo has the world's leading brand portfolio of snacks and drinks, such as 22 brands mainly producing income of one billion dollars. According to Beverage Digest, the company had a combined share of about 70 percent of the US carbonated soft drink (or CDS) market. You can navigate to this website to know more about coca-cola prices.

Both companies have a huge geographic presence in more than 200 nations. Competition between the two companies, popularly known as the cola wars, is mythical. Both have devoted considerable amounts of money on advertising that drive each other for a long time.

The threat of new entrants

This business does not face a significant threat from new entrants from Coca-Cola and PepsiCo all have extensive bottling and distribution systems and huge economies of scale. For example, Coca-Cola bottling partners have approximately 250 and 900 plants worldwide. 

It will not be easy for the new to do large capital investments required to compete with these companies. Dr. Pepper Snapple Group, Inc. (DPS) has witnessed a remarkable growth of the market in America of the CSD but does not have a global presence of the giant.

Significant investment

Coca-Cola and PepsiCo spend huge amounts of money in the creation, promotion, and promotion, and strengthen its distribution system. Since 2010, Coca-Cola and its bottling partners have spent more than $ 50 billion in new facilities, supply infrastructure, equipment, and detecting the retail customers. PepsiCo spent 5.9percent of net profit in 2013 on promotion and advocacy.