Atlantic Quench Cranberries (Essay Sample)

ATLANTIC QUENCH CRANBERRIES
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ATLANTIC QUENCH CRANBERRIES
Executive Summary
Atlantic Quench Cranberries is a Juice producing co-operative with its base being in the United States. The cooperative was formed about 80 years ago by two grape farmers and later Florida grapefruit growers joined the co-operative. In the current time it has a composition of about 630 cranberry and 46 grapefruit farmers. The cooperative has grown to become the best-selling brand of canned and bottled juices in North America since 1981.
The following is an outline of the marketing plan for Atlantic Quench Cranberries Inc. the aim of this plan is to maintain cranberry products the bestselling juice drink in North America and Europe. In order to carry out macro environment analysis for Atlantic Quench Cranberries (AQC), this plan will use Political, Economic, Sociological, Technological, Environmental and Legal (PESTEL) analysis, concentrating on the forces that are most relevant to the AQC company in order to evaluate any possible strengths, weaknesses opportunities and threats. The marketing plan main focus is the population that is highly demanding for natural and healthy drinks today. The budget for the marketing plan will cover the costs of doing market research, differentiating products, and advertising the improved products. The emphasis of this marketing plan is to ensure the healthy products from this company reach the target market.
Introduction
The Cranberry products include juice drinks with cranberry flavors. In 2002, the co-operative introduced to the market the Cranberry Classic in a 250 ml in an aim to target desire consumers in the convenience sector. In 2003 the organisation, AQC increased its products of the ‘light’ low calorie fruit drinks. These were inclusive of cranberry and blackcurrant, cranberry and raspberry, and cranberry and mango. Later in 2004, a white cranberry juice drink was launched and promoted as sweeter and smoother alternative to the red cranberry juice drinks. This measures have been introduced to specifically target the fast-growing chilled drinks sector. A cranberry and mandarin juice drink was introduced to the market in 2005.
Situational Analysis (Marketing Audit)
According to the publication by Public Health England (PHE), "Soft drinks account for the main cause of sugar consumption between 2008 and 2012" (Keynote, 2015). Several governmental and non-governmental bodies, such as National Health Service (NHS) and Scientific Advisory Committee on Nutrition (SACN) are; therefore, keen to reduce the consumption of sugary drinks by supporting and "pushing" sugar taxation (Mintel, 2014).
Due to consumer awareness, buyers prefer more healthy drinks with less containing sugar. In the UK demand is increasing for healthy juice drinks, leaving carbonated soft drinks behind, because of the poor image created in recent years (AQC, 2015).
Macro/Micro Environment Analysis:
PESTEL
"PESTEL analysis is used to audit environmental factors that can influence the organisation and gathered information can be used to guide strategic decision-making." This is according to Chartered Institute of Personnel and Development (CIPD, 2013). In order to carry out macro environment analysis for Atlantic Quench Cranberries (AQC), this plan will use Political, Economic, Sociological, Technological, Environmental and Legal (PESTEL) analysis.
Political
Based on the emerging regulations on the health and safety of individual customers, this could be identified as an opportunity for AQC, because of the low saturated sugar in cranberries, it has a potential of becoming a society’s approved alternative in soft drinks market. When considering potential taxation on sugar, AQC has an advantage over several giant soft drink manufacturers (such as Coca Cola and PepsiCo) that are currently investing high amount of resources in order to develop beverages that contain less sugar.
Economic
In terms of market share, the fruit juices segment has been on the decline throughout the review period, falling year-on-year from a share of 37.4% in 2010 to 34.5% by 2014 (Key Note, ). This could be explained due to negative publicity that has affected fruit juice market because of the high saturated sugar (PWC, 2015).
Sociological
With the increased preference of less containing sugar, the demand of AQC is also increasing. This would indicate that there is an opportunity for AQC to access more consumers, who are no longer loyal to carbonated soft drinks and are seeking for products that can add the value by offering more suitable, healthier beverages. However there is a threat of consumers gaining a perception of juices containing high amount of sugar and choosing alternatives such as bottled water, which has not been associated with sugar.
Technological
The current trend is being referred as "Snacking on the go" this is as a result to the busy state of the people. AQC will benefit from this trend because they are able to access busy locations, such as train and bus stations, office buildings or even gyms and schools. In order to avoid high costs of developing and maintaining such technology AQC could potentially choose to "rent" these from already existing company
Environmental
Changes in climate pose a great threat to the growth of cranberries. Cranberries are mainly grown in regions of North America (PWC, 2015). It is expected that the rain patterns are predicted to continue changing (EPAGOV, 2015). It is therefore, a threat for AQC because all of their cranberries are grown in the areas. This potentially will affect the quality and quantity of cranberries which could lead to AQC fail to meet the demand for the end products.
Market overview:
In the recent past there has been an increase in demand of fruit juice in the UK. Fruit drinks are deemed as health drinks and therefore, as a result of interest in living healthy lifestyle it has led to the high demand. Consequently the juice sector is increasingly gaining market share as a result of loss of popularity of the carbonated sector, which has a poorer image among consumers.
Market size
The UK market for fruit juices increased over the review period, rising by 2.3% from £1.76bn in 2010 to an estimated value of £1.8bn in 2014, despite two consecutive years of decline in 2013 and 2014, of 2.2% and 1.1% (Key Note, ).
By volume, the fruit juices sector declined year-on-year between 2010 and 2014, despite rising market values in 2011 and 2012, falling by a total of 15.7% from 1.18 billion litres to 995 million litres. The annual rate of decline in the sector has accelerated over the period, from 1.7% in 2011, to growth of 5.2% by 2014 (Key Note).
Value sales of cordials and squashes are expected to fall by 2% year on year to £724 million (Mintel, 2014b). Volume sales are expected to have declined by 12% over 2009-14 to 450 litres, with four consecutive years of decline since 2010. This is could be explained due to formats, which cordials have been presented and directly linked to changes in concentrates now being double-concentrates (8% decline in 2010) (Mintel, 2014b).
Growth rates
Hot summer conditions have proven to increase the consumption of carbonates, juice drinks and other beverages that are popular mixed with ice (Key Note).
Besides weather conditions, this ongoing decline in the fruit juices market is also attributable to the comparatively high price of products in this sector, with recent rising raw material costs pushing prices up further (Key Note), however this is not seen as a major threat for the industry as due to the raising economy is expected rise in consumer spending between 2014 and 2019 (Mintel, 2014).
The cordial and squash market is considered to be fluctuating, as has proven that the demand is rising in when the weather is warm (due to the warm weather conditions in the summer of 2013, increased the market value return by 1% (Mintel, 2014b). AQC is presented with the opportunity, given that it is evident that the consumers are willing to pay more for the detoxing and healthier options and is exactly what AQC can offer to its customers.
Customer and competitor analysis
Customer analysis and Market Segmentation
For fruit juices, consumption penetration in Great Britain was slightly higher among women than men, at 39.1% compared with 32.6% (Key Note, 2015). By age, consumption penetration was relatively similar across almost all age groups, ranging between 34.3% and 40.5% between the 15 to 19 and 55 to 64 age bands, with notably low penetration recorded among those age 65 and over, at 29.4% (Key Note, 2015). The highest level of penetration was recorded among those aged 25 to 34 and 20 to 24, at 40.5% and 40.3%, respectively (Key Note, 2015).
Competitor Analysis
Cranberry Juice has both direct and indirect competitors. The direct competitors are those organisations that are in the production of other verities of fruit Juices. One of the great direct competitors to cranberry juice is the super fruit juice. The company has brought about the introduction of other fruits such as gogi, pomegranates and acai into an industry that was traditionally dominated by the cranberries. The indirect competitors are the companies that are in the same industry, but are engaged in the production of other refreshment drinks. A good example is the Coca Cola Company. The juices blended from these fruits are believed by both Americans and the British to have a lot of nutrients, and they act as antioxidants. The uniqueness of these berries serves as strength for the competitors dealing in them thus the great impact they have created in the fruit juice industry. There has been a 20% increase in the volume of sales for the fruit juices.
SWOT Analysis
S
Market demand for light drinks
Cranberries low in sugar...