http://www.nytimes.com/2007/05/25/business/25drink.html?ref=business
"Coca-Cola Is Said to Buy Vitaminwater"--The New York Times
Last night, (Thursday, May 24, 2007) Coca-Cola approved a purchase of Glaceau, which makes Vitaminwater. That's a $4.2 billion trade in cash and stock. Glaceau is also known as the company Energy Brands, which Coke wants to buy to increase it's numbers of noncarbonated beverages since the recent surge of demand for these types of beverages. This coud be pretty big for Coke. Coke currently holds 43% of the soda market in US, while Pepsi holds a measely 31%. Pepsi had introduced a lot of noncarbonated beverages which may have helped, so Coke is on it's way to breaking new markets. Pepsi holds 50% of the noncarbonated beverage industry in the Untied States, while Coke only had 23%, which is why they are looking to buy more of these beverages.
Glaceau makes Fruitwater, an energy drink called Vitaminenergy and Smartwater, with electrolytes. Each bottle of Vitaminwater offers a new gift: Kiwi-Straberry guarantees "focus" and "healthy support for eyes and skin".
This is exciting stuff!!! So coca-cola is way behind in it's noncarbonated beverage market, and now they are vamping their portfolio with a whole slew of flavored water, Vitaminwater. This is great news. This is pretty typical of an oligopoly to buy up competitors, or in this case, to buy up products to compete. Pepsi has a big share of the noncarbonated beverage market in comparison to Coke, so it is great for Coke to buy up new companies to add to their stash of others. I'm sure we can expect to see changes in Vitaminwater's business style: i.e. more advertising, maybe changed labels and a new beginning for this beverage. Coke really is setting up to take over the world.
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3 comments:
yay! i've always wanted the world to be run by disney and coca-cola!!! this really made me feel for the 26% of the sodas and 27% of waters that aren't owned by huge corporations. it's gotta be hard competing against such giants. i guess that's where specialization is so important, it keeps smaller things like jone's soda competitive.
Wow, I didn't know the percentage of sales for Pepsi vs. Coca-Cola. It's interesting to see where each oligopoly stands, and how Coca-Cola is stepping up with noncarbonated beverages. I'll watch out for more comercials now.
huh...I didn't know the market share for those two was so far apart! Interesting - and they keep buying...and buying...and buying off other companies. Kinda like the Energizer bunny of soft drinks. :)
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