Deck 15: The Global Soft Drink Industry

Question 1

Describe the market structure of the beverage industry.

Answer 1

The beverage industry is a highly competitive one,which is experiencing rapid rates of growth due to changes in taste and preferences of the population.The change in demographics as well as in the socio-economic profile of the population is giving rise to the demand for new products which emphasize nutrition and low calories,as well as products which have a health benefit.There are two dimensions of this industry -- the entire refreshment beverage market is monopolistic competition.However,if we focus only on firms that produce and sell carbonated soft drinks,then the market structure resembles more like an oligopoly.In addition,firms in this industry will have to constantly find ways to differentiate their products by identifying niche market segments and working with health professionals and keeping up with changing demographics,and design products which meet the special needs of the targeted groups.

Question 2

What are the main factors driving the food companies to change their product lines in the beverage industry and how has the industry responded?

Answer 2

America today is different than what it was a few decades ago.It's much more diverse in ethnicity and socio-economic composition,the percentage of population which are classified as the aged and elderly is increasing,the percentage of population which is classified as obese is increasing,the incidence of cardio-vascular and cancer diseases is rising and so on.To meet the changing needs of the population,the food and beverage industry has responded by introducing new and innovative products to meet the challenges posed by the size and composition of the society.

Question 3

Which of the following best describes the entire U.S.refreshment beverage market?

A)monopoly
B)oligopoly
C)monopolistic competition
D)perfect competition

Answer 3

C

Question 4

Demand in the refreshment beverage market has been changing due to

A)changes in income.
B)changes in taxes and subsidies.
C)changes in the number of buyers.
D)changes in tastes and preferences.

Question 5

The demand for organically grown food is

A)increasing.
B)decreasing.
C)stagnant.
D)unpredictable.

Question 6

"Localvores" refers to food products which are

A)organically produced.
B)imported from foreign countries.
C)grown in places which are close to the point of consumption.
D)provide health and nutritional benefits in combating diseases.

Question 7

As the U.S.population ages,the structure of the demand for food products will change with

A)an increase in the demand for red meat products and a decrease in the demand for fish and poultry.
B)an increase in the demand for dairy products and a decrease in the demand for red meat.
C)an increase in the demand for fruits,vegetables and fish and a decrease in demand for fried foods,dairy products and items that contain a lot of sugar.
D)an increase in the demand for beverages and drinks and a decrease in the demand for solid food.

Question 8

The demand for U.S.produced packaged food products in foreign countries is expected to

A)grow.
B)slow down.
C)remain constant.
D)fluctuate.