Increased health consciousness and demand for trending beverages will drive growth
Los Angeles, CA (PRWEB) April 02, 2013
A healthy curiosity has caused consumers to quench their thirst with a growing variety of beverages. Increasingly, health-oriented consumers have switched from soda to the Juice Production industry's products, like ready-to-drink tea. “On the back of this consumer trend, marketing campaigns that promote stimulants or natural ingredients have encouraged the surge away from carbonated soft drinks toward this industry's functional drinks and other beverages,” says IBISWorld industry analyst Agata Kaczanowska. While these products have higher per-unit production costs, their steeper markups are expected to push industry profit to about 5.3% of revenue in 2013.
Driven by rising demand for new products, particularly from health-conscious consumers, the Juice Production industry's revenue is expected to expand at an annualized rate of 5.9% to $22.8 billion in the five years to 2013. Additionally, functional drinks and other new products that are heavily marketed to a younger demographic are sustaining growth. IBISWorld expects rising disposable income and rising market penetration to support an 8.2% revenue increase in 2013. As revenue rises, new companies are entering the industry at a rapid pace. Fast-growing niche products like energy drinks are attracting businesses, driving industry expansion. Over the five years to 2013, the number of companies is expected to expand at an annualized rate of 8.1% to 831. As consumers demonstrate increasing brand sensitivity for industry products, however, opportunities for new players will decline. Even so, the continued introduction of new brands in the market is anticipated to result in higher product prices, contributing to higher industry profit margins and revenue.
The top four players in the Juice Production industry generate about 71.1% of revenue. These companies have increased their share of revenue during the past five years through acquisitions, contracts and new product development. For example, Coca-Cola own Hansen Natural, which produces Monster Energy, but Hansen Natural retains the brand name, marketing and development of its products. Through this agreement, Hansen's products are distributed nationwide, and the company also benefits from Coca-Cola's existing infrastructure, which enables it to produce drinks at a lower price per unit. According to Kaczanowska, consolidation is projected to continue at a rapid rate during the next five years because major players will likely invest heavily in this growing beverage sector and away from carbonated soft drinks as consumer demand shifts in this same direction. New companies are anticipated to continue forming and expanding the variety of beverages. Thus, newer and faster-expanding segments of the industry have a lower concentration than established segments. For more information, visit IBISWorld’s Juice Production in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures fruit juice, functional drinks, ready-to-drink coffee and tea, and flavored water. This industry excludes carbonated soda producers, water bottlers and ice makers.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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