Fit Juice is a non-alcoholic beverage (NAB) company whose name has been inspired by the need to create energy drinks that enhances physical and mental performance while limiting common adverse effects. The name ‘Fit’ was enthused by the business’ desire to contribute to a healthy society by creating a substitute to sugar-added drinks. Therefore, as it is, the company’s name will play a crucial role in communicating the benefits of the products that will be offered. Additionally, the company aims to play a significant role in making quality and safe energy drinks accessible amid the growing consumption.
Revised Mission Statement for Fit Juice
The Fit Juice Company’s mission is “to be one of the world’s leading producers and distributors of energy drinks, using its variety of product flavors to differentiate its offerings. The business objective is to be a part of energy drinks revolution by offering reasonably priced quality drinks, served in attractive packages and by caring representatives. The company’s goals also include the need to operate ethically and be socially responsible by treating employees in a just manner, creating a conducive work environment, and engaging in a fair competition, and through ethical sourcing. However, Fit Juice also recognizes the need to incorporate new capabilities and technologies if the above-stated objectives are to be realized.”
Fit Juice mission statement shows that the company will use market-based pricing and superior products and services to entice consumers. However, the rationale for its components is based on the need to make quality and customer relationship as the main selling point. Additionally, consumer relationship, relationship to employees, work environment, the type of relations with other industry players adds to the desired reputation that will keep users coming back for Fit Juice products. Besides, in the contemporary business world, the success of companies depends on how they show concern for the outside environment and the broader community as a whole. Therefore, it is crucial to lay out the business’ social responsibility plans. In other words, the Fit Juice mission statement established the basis for its products, pricing, quality, growth, work environment, and relationship with customers and employees as well as with other industry players.
The Developments in the Non-Alcoholic Beverage Industry
The NAB industry as a whole has experienced robust growth over the past few years (IBISWorld, 2018). For instance, the US market for NAB in 2016 was roughly $172 billion and is projected to grow to approximately $190 billion by 2020 (Strumwasser, 2016). As for the energy drink, the US market size nearly reached $13 billion two years ago (Strumwasser, 2016). The latest reports also reveal that in 2016, energy drink sales amounted to roughly $2.8 billion (Statista, 2018b). Given the high market growth potential, the industry sales have consistently increased for the last five years. Additionally, according to recent statistics, energy drinks in the US reported a 5.3% growth in volume sales in 2016 (Strumwasser, 2016). The table below is an illustration of the growth trends.
Factor
2 years ago
Past year
This year
Next year
Next five years (Avg)
Total revenue in billions (Statista, 2018b)
2.80
2.87
2.98
3.13
2.94
Total units sold in billions (Statista, 2018b).
0.98
1.04
1.1
1.15
1.06
Industry growth rate (IBISWorld, 2018).
5.3%
5.2%
5.2%
5.13%
5.2%
GDP growth rate (Statista, 2018a)
2.8%
3.2%
2.0%
2.0%
2.5%
Rate compared to GDP (+ or %)
2.5%
2%
3.2%
3.13%
2.7%
The increasing health consciousness, as well as the changing consumer lifestyle, is also another significant trend affecting the non-alcoholic beverage industry as a whole and especially the energy drink sector. For instances, more consumers are increasingly becoming aware of health wellness products, an aspect that has made more customers move from carbonated soft juices to energy drinks (IBISWorld, 2018). The shift is expected to steer future demand for energy drinks. Additionally, the hectic lifestyle of consumers is a factor that is projected to increase the demand for energy beverages (IBISWorld, 2018). At the same time, consumption of energy drinks has turned out to be a status symbol, more so among the youths (Al-Shaar et al., 2017). Such a change in consumer behavior is expected to drive the demand for energy beverages further. The above trends, that is, the projected growth potential, changes in consumer behavior and increasing health consciousness are the main reasons Fit Juice is focusing on the energy drink category. However, the fact that a few key players dominate over 70% of the energy drink market is a factor that could create a barrier to entry for startups (IBISWorld, 2018).
Fit Juice Strategic Position
Fit Juice will differentiate itself from competitors through customer perception factors. In other words, the company plans to appeal to its consumers based on price, quality, product attributes, consumer service, social influence, and convenience. For instance, in a bid to lure customers, Fit Juice will use penetration pricing strategy, that is, offering goods at prices lower than competitors’ to induce buyers to try the products and gain awareness. At the same time, the business will provide superior customer services, for instance, by building strong customer relationships. Additionally, Fits Juice will invest in market research to ensure that consumers get products that satisfy their actual needs.
Distribution Channels
Fit Juice will adopt both direct and indirect distribution channels. For instance, given that the company will be operating within a 100-mile radius of my home address during the first few years of operations, the products will be sold in the business' physical store. At the same time, Fit Juice will sell its products through retailers such as, restaurants, convenient stores, and sales agents, more so for consumers who reside far away from the physical store.
Types of risks the business faces
Even with the considerable potential of the energy drink industry, Fit Juice faces different kinds of threats that might be a barrier when it comes to achieving the company's objectives. For instance, the business might be exposed to product risk, financial uncertainty, and legal threat. For example, there is a chance that the products might not meet consumers’ needs, thereby affecting the projected sales (Abrams, 2014). However, to mitigate this kind of risk, the company will conduct thorough market research and product testing. Finally, given that the economic conditions and might increase the cost of operations and reduce sales, the business might be exposed to financial threat (Abrams, 2014). To manage such a risk, it will be essential to maintain an adequate amount of capital that can allow the company meets its financial obligations at all times. Finally, the energy drink industry is highly regulated due to the health concerns associated with the products (Al-Shaar et al., 2017). Such regulation could have a negative impact on the business. However, to mitigate legal risks, Fit Juice plans to comply with all laws put in place by regulatory agencies.
Fit Juice SWOT Analysis
Strengths
Psychological and physical benefits attributed to energy drinks (Al-Shaar et al., 2017).
The ingredients used have been proven to accelerate performance (Al-Shaar et al., 2017).
The team’s management knowledge.
Weaknesses
Limited product line.
Inferior production expertise and less experienced management team compared to established brands.
Small customer base.
Opportunities
Extension of the product line- introducing new ideas of products and features.
Adopting technology-partnering with Facebook, Instagram, and other social media platforms to advertise the products.
Increasing demand for energy drinks (Al-Shaar et al., 2017).
Changes in consumers’ preferences and lifestyle (IBISWorld, 2018).
Threats
Health concerns that could lead to stringent laws governing the industry (Al-Shaar et al., 2017).
Increased consumer awareness-users can compare different products and choose alternative drinks.
New products of energy drink, for instance, organic energy beverages can reduce the number of standard drinks sold.
Strong Competition from established brands such as Red Bull and Monster Beverage (IBISWorld, 2018).
References
Abrams, R. M. (2014). Successful business plan: Secrets " strategies
(6th ed.). New York: Planning Shop.
Al-Shaar, L., Vercammen, K., Lu, C., Richardson, S., Tamez, M., " Mattei, J. (2017). Health effects and public health concerns of energy drink consumption in the United States: A mini-review. Frontiers in Public Health, 5. doi:10.3389/fpubh.2017.00225
IBISWorld. (2018, May). Energy Drink Production (US) - Industry Research Reports | IBISWorld. Retrieved from https://www.ibisworld.com/industry-trends/specialized-market-research-reports/life-sciences/wellness-nutrition-supplements/energy-drink-production.html
Statista. (2018a). U.S.: Real GDP Growth by Quarter 2011-2018. Retrieved from https://www.statista.com/statistics/188185/percent-chance-from-preceding-period-in-real-gdp-in-the-us/
Statista. (2018b). Energy drink sales in the U.S., 2017 | Statistic. Retrieved from https://www.statista.com/statistics/558022/us-energy-drink-sales/
Strumwasser, S. (2016). Non-alcoholic beverage industry summary white paper. Retrieved from Green Circle Capital Partners LLC website: http://greencirclecap.com/non-alcoholic-beverage-industry-summary-white-paper/
