Beverage and Tobacco Industry Research Paper

Excerpt from Research Paper :

Beverage & Tobacco

Beverage and Tobacco Industry Analysis

Opportunities

Although the beverage and tobacco industry face mounting obstacles to their success, there are also an infinite number of possible opportunities. One clear opportunity is provided by emerging markets. The numbers of individuals who have greater levels of disposable incomes are increasing exponentially in the developing world. This represents a tremendous opportunity for corporations in the beverage and tobacco industry to tap into these emerging markets. Another opportunity for this industry can be thought of in terms of a localization initiative. There are growing concerns in industrialized nations which are centered on health issues. Thus the beverage and tobacco industry stands the potential to innovate based on the consumer demands. They could create a diversified product portfolio that was catered to the needs of the specific market.

Threats

There are a growing number of potential threats that plague the beverage and tobacco industry. The first is the trend that is emerging in many of the industry's primary markets which is that the consumers are becoming more health conscious. Thus consumer demand for tobacco products and unhealthy beverages that contain ingredients such as high fructose corn syrup are diminishing rapidly. Many consumers are dedicated to living more healthy…

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There are a growing number of potential threats that plague the beverage and tobacco industry. The first is the trend that is emerging in many of the industry's primary markets which is that the consumers are becoming more health conscious. Thus consumer demand for tobacco products and unhealthy beverages that contain ingredients such as high fructose corn syrup are diminishing rapidly. Many consumers are dedicated to living more healthy lifestyles and as a consequence they are shunning products that are not consistent with this preference. Another threat that is driven by consumer preference but represent an entirely different level of threat is that many health considerations are actually the subject of increasing regulations. For example, many cities have chosen to ban smoking from public spaces as well as prohibit unhealthy beverages being sold at places such as schools.

Suppliers

There are a countless number of manufactures and suppliers in this industry. Phillip Morris is one of the world's largest tobacco companies which name was officially rebranded in 2003 under a new name known as Atria. Atria also holds a significant stake in Kraft foods and also subsidiaries that operate in the wine industry. PepsiCo is one of the largest food and beverage companies and the largest U.S. based firm in the industry. InBev is one of the largest alcoholic manufactures and distributors in the world and operates in over one hundred thirty different countries. It recently purchased Anheuser-Busch in 2009 which significantly increased the size of the operations. To complete the deal, the United States required that InBev quit importing certain brands of beers to the U.S. market so that InBev would meet anti-trust regulations.

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