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Who are the major players in the non-alcohol beverage space (ex. soda manufacturers) and who are the startups and independent brands who are disrupting the space. What are the typical margins for independent brands?
Hello! Thanks for your question about the non-alcoholic beverage market. I understand that you are looking for information about the major players, startups and independent brands as well as the profit margins for the latter. Based on our research, the non-alcoholic beverage market is dominated by Coca-Cola and Pepsi Co, both carbonated soft drink companies. Startups that are trying to compete with the large companies can be categorized into juices, hydration, probiotics/Kombucha and craft soda. The net profit margin for independent brands can range from as low as -11 to as high as 60%.
MAJOR PLAYERS IN THE NON-ALCOHOL BEVERAGE SPACE
Market Realist identified the following as the key players in the refreshment beverage space in the US based on market share.
1. Coke
2. Pepsi
3. Mountain Dew
4. Dr. Pepper
5. Nestle Pure Life
6. Gatorade
7. Sprite
8. Poland Spring
9. Dasani
10. Aquafina.
Note that the top four are carbonated beverage companies. Coca-Cola and Pepsi together make up 59% of the US refreshment beverage market volume. Nestle, Poland Spring, Dasani and Aquafina on the other hand are bottled water brands while Gatorade is a sports drink.
DISRUPTORS
Due to health reasons, a decline in carbonated soft drink consumption in the US has been observed year after year. In 2014, the decline in volume was at 1.2% and CSD companies are starting to face competition from healthier non-carbonated beverage companies. Small brands are expected to grow into half of the non-alcoholic segment and estimated to be a $95B market by 2020.
Smaller non-alcoholic beverage companies that are starting to disrupt the market can be categorized into super premium-juices, premium hydration, probiotics or Kombucha and craft soda. Below are the up and coming companies per category.
Super Premium Juices:
3. Ripe - estimated revenue undisclosed
Premium Hydration:
Probiotics/Kombucha
2. Health-Ade - estimated revenue undisclosed
Craft Soda:
1. Dry Soda Co.
2. Sipp
3. Q Drinks
Estimated revenue for all three were undisclosed.
TYPICAL MARGINS FOR INDEPENDENT BRANDS
Since startups/independent brands are really not required to disclose any financial information, it has been a challenge to find out what their specific margins are. Juicero, a non-alcoholic beverage startup for instance, does not reveal its financials but has several investors including Campbell Soup Company, Artis Ventures, AlphaPrime Ventures, Acre Venture Partners and Bryant Stibel.
To at least get an idea of margins, below are some smaller companies that divulged some financial information:
1. Old City Soda
2. New Age Beverage
The company's portfolio includes XingTea, Aspen Pure, Artesian Water, Live Kombucha, Marley One Drop, RTD Coffee and Marley Mellow Mood. Currently, their net profit margin is at -11.43%.
3. Full Motion Beverage Inc
FMBV, a non-alcoholic beverage developer and distributor has a net profit margin on a 5-year average of -2,612.85 for the company, 3.17 for the industry and 13.37 for the sector. Their operating margin on a 5-year average is -717.49 for the company, 5.41 for the industry and 18.37 for the sector.
4. Youngevity International Inc
This small corporation offers beverages that support a healthy lifestyle. Their net profit margin on a 5-year average is 0.87, 3.17 and 13.37 for the company, industry and sector respectively. Their operating margin on a 5-year average is 2.31, 5.41 and 18.37 for the company, industry and sector respectively.
Analysts say that established companies like Coca-Cola and Pepsi Co still have the biggest operating and net income margins.
CONCLUSION
To wrap it up, CSD companies such as Coca-Cola, Pepsi, Mountain Dew and Dr. Pepper are the major players in the non-alcoholic beverage space. Makers and distributors of non-carbonated drinks are expected to disrupt the market due to health awareness however there is limited financial information regarding these smaller companies.
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