Top 100 Beverage Companies
By RENEE PAS
annual ranking of the top companies in the
beverage business includes companies from every category.
Two categories are tied when it comes to the beverage
segments that show up most frequently on the Top 100 list: beer and bottled
water are both produced by 24 differe nt companies. Water tends to be
produced mostly by companies that also manufacture soft drinks and
alternative beverages, making it a big crossover category.
While there are 24 companies that include water in their mix, only 7 companies claim water as their only product category.
$10 billion club
Sales figures among the Top 100 vary from companies reporting around $10
million in sales to those reporting more than $10 billion. The $10 billion
marker lands you in the big leagues. That claim to fame is reserved for
only eight of the Top 100: The Coca-Cola Co., Nestlé, Diageo,
Anheuser-Busch, SABMiller, Interbrew, Heineken NV and PepsiCo. For five of
those companies, beer is a major revenue generator, but it is not part of
the mix at all for No. 1 place-holder, Coca-Cola, which had $23.1 billion
But even landing at No. 100 on this list is a big
distinction, and the company representing the mean on the list was $207
Falling in line
The names in the first
few slots on the Top 100 haven’t
changed much from year to year. For the last three years running it’s
been the same four companies lining up on the front lines: The Coca-Cola
Co., Nestlé, Diageo and Anheuser-Busch.
But companies farther down the list also are making
news. Internal reorganization continues at Miller Brewing Co. in the United
States following South African Breweries’ 2002 acquisition of Miller.
Greater marketing focus and closer ties with distributors are credited for
some of its 2005 success. SABMiller added $1.9 billion in 2005 to report
$14.5 billion in sales, compared with $12.6 billion in 2004.
Similarly, InBev is now realizing the full benefits
of its merger. Last year marked the first full year of combined operations
following the 2004 merger of Interbrew and Am Bev (Companhia de Bebidas das
Americas). InBev jumped an extra $2.2 billion in 2005, reporting $13.8
billion in 2005 sales compared with $11.6 in 2004.
New York state of mind
New York is the state that the greatest number of
beverage companies on the Top 100 call home. Twelve companies have
headquarters there. Actually the entire East Coast rates high for headquarters; 35 of the Top 100 companies reside on the East
Behind the numbers
While Coca-Cola Co. maintained its No.1 spot this
year, PepsiCo made a huge advancement toward the end of the 2005 when, on
Dec. 12, its market capitalization moved ahead of Coca-Cola’s for the
That day, Pepsi closed up 31 cents at $59.31 to give
it a market capitalization of $98.4 billion: Coca-Cola closed down 36 cents
to $41.15 for a market capitalization of $97.9 billion. The five-year trend
shows Pepsi stock rising by more than a third compared with Coca-Cola stock
falling 30 percent.
Wall Street analysts report the shift reflects
investors’ preferences for Pepsi’s more diversified portfolio
of beverage and snack brands. Analysts also credit Pepsi with embracing
sports drinks and water earlier on than Coca-Cola.
Undeniably, however, Coca-Cola continues to sell more
beverages. Suffice it to say, the famous rivals
are now more competitive than ever.
This year’s list
continues to follow recent trends of companies being bought, merged or
otherwise transforming themselves. Here are the changes that stand out on
this year’s Top 100:
No. 3 - Diageo: Acquired California winemaker The Chalone Wine Group
in 2004, boosting its presence in the U.S. market with wider distribution.
No. 9 - Pernod-Ricard:
Purchased Allied Domecq in 2005 after a bidding war with its competitors.
The move launched the company into the No. 2 spot in the spirits industry.
No. 12 - Molson Coors: 2005
marked the first year as a new company following the merger of Adolph Coors
Co. and Molson Inc. in 2004. The company reported a 27.9 percent increase
in sales for 2005.
No. 15 - Constellation Brands: Upped its wine portfolio with
the acquisition of The Robert Mondavi Corp. in the last days of 2004 on top
of taking a 40 percent ownership stake in Italian winery Ruffino that year.
Both contributed to a 15 percent increase in net sales last year and took
the company to more than $4 billion in sales for the first time.
No. 57 - Apple & Eve: Bought Northland Cranberries’ branded juice
business in 2005, making it the leader in 100 percent cranberry juice
products. The deal included a supply agreement for Northland, which
continues to operate as a grower.
No. 63 - Cruzan International: Changed its name from Todhunter
International to Cruzan International in 2005 to emphasize its leading rum
brand, Cruzan. The company makes its final appearance on this year’s
list, as it announced last fall that it would become part of Absolut
Being the top dog
Executives at No. 1 Coca-Cola may not get the same
kind of paparazzi attention as Britney Spears, but the company is
definitely hounded by competition. Not to mention that when you are already
the powerhouse, it’s a lot tougher to keep racking up the increases
year over year.
Coca-Cola managed to do it last year, adding an extra
$1.2 billion in 2005 sales vs. 2004. The company credits the increase to
its efforts to stabilize share in the RTD segment (after losing share the
prior year) and growing sports, juice and water worldwide. On the flip
side, it lost worldwide share in teas and coffees last year. The response
to that: “… improvement is a key focus for 2006.”
Like many of the brands in our Top 100, the Starbucks
name carries a lot of leverage with consumers. It’s not merely
trendy, it’s become part of pop culture and it is extending its
influence beyond the coffee shop.
Starbucks now has an entertainment division,
Starbucks Entertainment, that’s designed to create marketing ventures
to link the brand with films, music and books — in some cases with a financial stake for Starbucks. The company’s first
film deal was backing Lionsgate’s Akeelah and the Bee (the equity
stake was not disclosed), released this spring.
Chairman Howard Schultz recently told USA Today, “Our customers
have given us permission to extend the experience.”
Strengthening the Bull
Red Bull has been
steadily climbing the Top 100 list, with enviable sales gains — an
accomplishment made even more significant considering all of its sales stem
from just one brand and two products, a regular and sugar-free version.
Last year, sales grew 28.9 percent to land the company at $2.5 billion.
This summer, the company plans to add one more
variation to its mix … a larger 16.6-ounce version of the product is
being tested in Las Vegas. While many competitors have launched comparable
energy drinks at this larger size (as opposed to the traditional 8-ounce
energy drink size) with price points hovering around CSD prices, Red Bull
is pricing its 16.6-ounce product at $3.59. “We want to see the
impact of a premium-priced 16-ounce product on the overall category,”
says Red Bull spokesperson Patrice Radden.