IndustryShowcase

EricHenckels

BeverageMarket

•  Market/Economics•  Company/Product

•  Compe??on/Customer

•  Externals

Market

•  Beveragesisabigword– Necessity(WaterLoss)

•  Sweat:0.5L•  Breathing:0.25L•  Loss:1.5L

– Consump?on•  2L/Day•  7BillionPeople•  5.1TrillionLiters/Year

MarketSegments

•  Consumer,Non‐cyclical–  Beverage

•  Alcoholic–  Beer– Wine

•  Non‐Alcoholic– Water–  ‘Soda’–  Coffee*–  Energy

–  Liquor–  Other

–  Sports–  EnhancedWater–  Tea*–  Juice

MarketVolume

Players

$0 $10 $20 $30 $40 $50 $60 $70

Monster

Brown‐Forman

Dr.Pepper/Snapple

MolsonCoors

SAB‐Miller

Diageo

Anheuser‐BuschInBev

Ambev

SAB(Coke‐Heineken)

Pepsico

Coca‐Cola

Billions

Profit

Revenue

Profits

0.210.57 0.61 0.67

2.562.98

4.034.40

5.27

6.44

8.57

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

Opera-ngProfit(Billions)

$80B

•  Anheuser‐BuschInBev•  Belgo‐BrazilianFirm•  25%GlobalMarketShare

•  Ambev(Ambev)isaBrazil‐basedsubsidiaryofImBev•  Produce,distributeandsellbeer,carbonatedsoidrinks(Pepsi)•  14countriesacrosstheAmericas•  Canada,representedbyLabaj’sopera?onsincludesdomes?csalesin

Canada.

$120B

•  LargestSpritsManufacturer•  $60B

50Cent

•  GlaceauwassoldtoCoca‐Colafor$4.1B

•  Cur?sJackson(50Cent)had10%stake

•  Cashed~$150Mfromthedeal

Food&Beverage

Compe??on•  Globaliza?on

–  Coca‐ColafailedinitsajempttobuyChina’slargestjuicegroup,Huiyuan,for$2.4billionthisyear

–  PepsiCooffered$3.8Bfor66%ofRussia’sleadingdairymanufacturer•  Mergers

–  InBev’spurchaseofAnheuser‐Busch–  ProposedmergerbetweenKirinandSuntorywouldcreateaglobal

foodandbeveragegiantwithrevenuesexceedingthoseofAnheuser‐BuschInbev’s$22.3billionandCoca‐Cola’s$31.9billion.

•  Expansionintonewmarkets–  NonalcoholicwithAlcoholic–  Food&Beverage–  Soda,EnergyDrinks,SportsDrinks,EnhancedWater,Water

Soda

SodaLandscape

•  Coca‐cola– DietCokenow#2mostpopularsodaovertakingPepsi

•  Pepsi–  IndraNooyi–  Focuson‘healthy’

•  20%ofRevenue•  NoSuperbowlAd2010

–  Spendingtoincrease•  30%inUSMarke?ng

EnergyDrinksMarketShare2007Brand MarketShare RedBull 12.0%Monster 8.2%SoBe 8.1%Rockstar 4.3%FullThrojle 2.7%

•  EnergyShotMarket•  Market

•  Womenarealargerpercentage•  >31yearsoldarealarger

percentage•  5‐hourenergy

•  60%ofmarket•  Coca‐Cola–NosShot

•  $26.9Bwith8.6%growth•  MarketismostlyMale18–32•  Marketismaturing

Water’sRise

Water’sPeak?

Transi?on&Causes

•  Nielsenreportsthatbojledwatersalesfell3.3%intheUSlastyear.

•  Evianreportedthatits2008profitsshrank69%inpartbecauseofdecliningsalesofbojledwaterinFrance,Spain,BritainandJapan.SalesofbojledwaterinFrancefellby7.5%lastyear.

•  Switzerland‐basedNestlé,theworld'sbiggestbojledwatermanufacturer,includingthebrandsPerrierandSanPellegrino,reportedthatsalesofitswaterdeclinedby4.1%inthefirstthreemonthsof2009,withapar?cularlystartling9%dropintheBri?shmarketlastyear.

•  Trash,Safety,Cost,Effort,andEnvironment

Tea

•  Aierwater,teaisthemostconsumedbeverage•  3.21MtonesofTeaannually

•  Produc?on

Coffee•  1/3theconsump?onofwater•  2ndmosttradedcommodityintheworld•  Price/Consump?on

ToddCarmichael

•  LeBernadin•  FastestUnaided?metotheSouthPole

Externals•  NewProducts

–  DesignerDrops,Func?onalWater(Dream,etc)•  Regula?on

–  Water,etc•  Health

–  HonestTea(Coca‐Cola$43Mfor40%)•  Environment

–  ShelfStability(NestleMilk)•  Commodityvs.Marke?ng

–  BojledWater–  Cokevs.Pepsi–  Starbucks–  Joe’s–  Otherexamples?

ThankYou