Soda is one of America’s most popular beverages, with the average person consuming nearly 43 gallons per year. When it comes to the carbonated soft drink business, there are his three main companies that hold the majority of the market share. It’s Coca-Cola. (teeth) – Get Free ReportPepsiCo (PEPs) – Get Free ReportKeurig Dr Pepper (KDP) – Get Free Report.
Last year alone, Coca-Cola generated $42 billion in revenue worldwide. The stock is famous for being Warren Buffett’s favorite, with investor legend claiming he’s “his quarter of Coca-Cola.” Although his stake in the company is slightly less. Buffet owns about 9% of the company.
But it’s hard to mention Coca-Cola without its equally big rival, Pepsi. Both companies own hundreds of consumer subsidiaries in their portfolios, including Fanta and Sprite (Coca-Cola) and Mountain Dew and his 7UP (PepsiCo).
Generational Issues: Young People Don’t Drink Soda
Diet Coke and Mountain Dew are readily available in most bars and restaurants, but the propensity to drink soda seems to be on the wane among one major demographic: American youth. In fact, a study by researchers at Harvard University found that the number of young people who drink at least one sugary drink daily has fallen from 80% to 61% in recent years.
Young adults born into Generation Z after 1997 are well-known as a health and sustainability-conscious cohort with a wide range of beverage choices in today’s market. Gen Z’s favorite emerging drink, Poppi, a healthy probiotic soda with clever branding, is now worth billions of dollars. So there’s no question that PepsiCo wants to replicate (and beat) what’s already working.
No wonder soda companies are desperate to revitalize their branding and make their products more appealing to a skeptical younger generation.
PepsiCo is betting Gen Z will love its new drink
Starting in January, PepsiCo will try to capture the hearts (and tastes) of millions with its newest drink. According to the brand’s blurb, it aims to take on Coca-Cola’s favorites with “a sip, refreshing and refreshing formula to gain share and grow the category.” Claims to target his Generation Z consumers.
Called the Starry, the drink is billed as a Sprite-like (lemon-lime) drink with eye-catching packaging and a “purpose-oriented” mission. and has a “sustainability commitment”.
Sprite’s market share has risen from less than 6% a decade ago to more than 8% last year, according to Statista data, despite fewer people drinking soda.
A recent survey found that most Gen Z shoppers prefer to buy from sustainable brands, are willing to pay 10% more for sustainability, and care more about sustainability than brand names. It is worth noting that one thing was found.
It’s too early to tell if the messages will be converted, but this certainly isn’t the first sprite for PepsiCo. Both Slice and Storm were early attempts to compete with Sprite’s iconic lemon-lime he flavor, and both have since been discontinued. PepsiCo’s current iteration, Sierra Mist, can still be found at most major retailers, but sales have been slow, capturing just 0.1% of the dollar share.
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