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2011 U.S. Beverage Results

March 27, 2012 | About:
The Science of Hitting

The Science of Hitting

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As an individual investor, sometimes it is difficult to get market share data or industry statistics, particularly when management doesn't make it a habit to frequently disclose such figures. As many readers will know from experience, it is difficult to effectively analyze industry competitiveness and barriers to entry with simple rankings of first, second, third, etc.

Thankfully, Beverage Digest uploads annual data on the U.S. carbonated soft drink (CSD) market, which is useful for investors in analyzing year-over-year share gains/losses. This year, Beverage Digest has updated their data to reflect a shifting industry; as opposed to just listing CSD market share, the company lists liquid refreshment beverage (LRB) share as well to account for the increasing important of non-carbs such as bottled waters, sport drinks, ready to drink (RTD) teas and coffees, and juice drinks.

Within the CSD category, Coca-Cola saw their share of the market decline by 0.1% to 41.9%, while PepsiCo's share fell 0.8% to 28.5%. Of the big three, Dr. Pepper Snapple performed the best in relation to last year, holding share steady at 16.7%. By brand, Coke and Diet Coke maintained their top positions, with Pepsi, Mountain Dew, and Dr. Pepper rounding out the top five slots.

In overall LRB's, Coca-Cola's share declined 0.2% to 34%, but was still good enough for a decent lead over PepsiCo, which holds 26.9% of the category after a 0.6% loss of share in 2011. By brand, Coke maintained a demanding lead at 18.8% of the category, compared to just 10% for #2 PepsiCo. The first non-CSD in the rankings is Gatorade, at #5 with 4.2% of the LRB category.

For interested investors, the full results can be found here.

About the author:

The Science of Hitting
I'm a value investor, with a focus on patience; I look to buy great companies that are suffering from short term issues, and hope to load up when these opportunities present themselves. As this would suggest, I run a fairly concentrated portfolio by most standards, usually with 8-10 names; from the perspective of a businessman rather than a market participant / stock trader, I believe this is more than sufficient diversification.

I hope to own a collection of great businesses; to ever sell one, I would demand a substantial premium to the average market valuation due to what I believe are the understated benefits to the long term investor of superior fundamentals and time on intrinsic value. I don't have a target when I purchase a stock; my goal is to replicate the underlying returns of the business in question - which if I've done my job properly, should be very attractive over many years.

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