Soft drinks: main issues for producers as regard distribution
We can cite three main issues for soft drinks producers as regard distribution
✓ Access to and success in distribution
First, for many producers, the access to some distribution channels like super/hypermarkets or even restaurants is locked since the most famous soft drink companies are forcefully monopolizing them. For example Coke and Pepsi keep maintaining favorable relations with the large retailers so that this situation remains the same. The impact is obvious in retail stores where shelf space is often matte to tension and fierce competition.
Moreover they keep buying full ownership of bottling plants which is a strategic resource in soft drink distribution. Thus it is hard for new or rival producers to compete in distribution efficiency.
✓ Private label imitation products
However retailers, who start marketing their own products under private labels, may decide to push these products instead of the majors in their supermarkets. Indeed they will be able to control and increase their margins which at least will be higher than those they will get by selling current producers’ soft drinks. The consequence will be more important for new producers who will be confronted to narrower distribution possibilities and networks. This may also have an impact on the price if we consider that private labeled product are less expensive on the soft drink market than the average price of the major brands.
✓ Distribution channels and price discrepancies
The selling price of a unit of product widely depends on the channel segmentation. For instance restaurant and bar fountain drinks, single drinks at gas stations and take-home packs at supermarkets present all different prices. These discrepancies in channel price might have an effect on the consumer’s purchasing act. The later clearly has an idea of where he could find the product at a lower price. This can...