Verge beverages is a non-alcoholic bottling company that will be based in southern Australia in Aldaide. The company’s concept largely conceptualized from one of the greatest Australian regions, the wine region which is known to have existed for more than fifty decades, and is home to some well-known beverage making companies. The company would therefore want to capitalize on the region’s availability of production techniques, warm climate that supports the production of suitable ingredients used in making non-alcoholic beverages.
Verge beverages will mainly produce coconut water, a non-alcoholic beverage that will be produced and bottled at the company’s facility. Coconut water will majorly be produced using coconut water, as the major ingredient, mixed with varying proportions of other protein compounds such as carnitine, a compound containing amino acids which can effectively be used in diabetes management due to its effectiveness in the absorption of insulin. The company would largely produce the non-alcoholic beverage for export to North America, and for local consumption due to the large market existing in most parts of Northern America.
Verge beverages mission statement
A mission statement is a declaration statement that highlights the company’s purpose of existing (Covey, 2009). It also helps in stating various reasons on why it is manufacturing or producing a given product, while involving various stakeholders such as customers, product and market attributes.
Verge beverages mission is to increase its shareholders value of investment by using technologically proven methods to manufacture non-alcoholic beverages, for both the young and old generation, as well as to strategically position its beverage in the market. The company does this by using quality centered approaches in order to meet the expectations of its customers in the
non-alcoholic beverage segment. This is because it believes that the production of quality beverages is key in sustaining the commercial viability of its business operations. Therefore to meet the market demands, the company believes that a successful brand stands more in the minds of consumers, which can only be attained by the use of safer methods that benefit the health of customers and at the same time adhering to high standards of quality.
The global trend in non-alcoholic beverages shows considerable improvement in terms of consumption, with most tastes known to sell more in restaurants. It shows that the segment is competitive and dynamic, with well-known brands such as Pepsi and Coca-Cola constituting the brands which have large market share. There has been an upward trend in the production and manufacture of other blends and flavors such as drinks which are ready for drink, smoothies, coffee already packed as well as other variants in the non-alcoholic line (“Non-Alcoholic Drinks Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2014-2020, n.d.”).
Emerging trends also indicate the coconut water stands at 50% in high market potential areas, with lemonade, soda and organic made products also featuring (“Leading trends in non-alcoholic beverages on restaurant menus in the United States in 2015, 2015”). The trends also indicate that most companies are using technology, coupled with brick and mortar model of business to reach its consumer segments in terms of enhancing access to products as well as achieving a competitive advantage.
Consumers are also becoming much aware of highly processed products and the negative effects of such on health. There are smart consumers who heavily attribute these aspects to their
buying behavior, hence shifting the market to health and wellness products. This category of products will in the future take over the non-alcoholic beverage segment due to increased focus on health aspects in which consumers will prefer a range of health based products compared to refreshment based products.
The reason behind the coconut water by verge beverages revolves around many reasons, with the one being to respond to the dynamic nature of the competitive market. Coconut water beverage includes the elements of refreshment, as well as health and well-being. This is because there is growth in refreshment based products hence producing a flavor that is different in the market can attract consumers because the ingredients used are rarely found in local community markets. On the other hand, health and well-being plays a key role among most Americans where the market is big, due to the increased awareness of processed products and lifestyle based ailments, hence producing this product would suit most customers.
Coconut water contains compounds that are healthier and hence its consumption can help both the younger and the older generation. The younger generation can consume it since it does not contain harmful compounds unlike some fizzy drinks and soda, while can also comfortably be consumed by the aged whose lives are at risk due to harmful compounds like gluten, hence consuming naturally packed products like coconut water adds some nutrients among the old hence suppressing high risks of lifestyle diseases.
Verge beverages operates in North America and Australia which have high rate of lifestyle illness (Wass &Stewart, 2011), with the same being reported in other areas like the UK, Caribbean
and parts of Africa. Therefore, the production of coconut water by verge beverages may be seconded by health based institutions and research labs, as one of the global products that can suppress and help in the management of lifestyle diseases such as diabetes. Hence, its production is likely to bring a paradigm shift among non-alcoholic beverage makers towards health-based approaches in business. This will also complement the company’s mission towards the production of healthy products as outlined in its mission statement.
Verge beverages will also consider a strategic position to remain visible in the market as outlined in its mission statement. According to Kozami (2002), strategic positioning involves the various elements of consumer needs, which verge beverages will consider establishing. The company shall consider building the brand in order to position itself as a leader in the production of healthy drinks, a segment that is less dominated by companies. This is because the target markets have high cases of lifestyle induced diseases, hence producing a product that can be used in the management of the disease will be profit both the consumer and the stakeholders, as consumers would buy the product in order to treat or suppress their condition. The company would therefore use more effort to position the company and its products in the market.
Due to the potential market at the local and international level, verge beverages will consider various distribution channels. Distribution channels are components, systems and people within an organization that facilitate the movement of goods and products from the production entity to the end-user (Machando & Cassim, 2002). This will be central in the
logistical operations at verge beverages. The company shall use the broadline distributorship approach where a distributor shall solely manage an entire market segment. The broadline distributor will manage other smaller distribution channels for the company in a given area, such as distributor A managing 10 suppliers. The distributor acts as a link between the market and the producing company, where various chains of retail stores, groceries, clinical organizations and small shops obtain goods. At the core level (distributorship level), an enterprise resource planning software will be installed to manage the ordering, shipment and stocking processes from the manufacturers main warehouses to feed both local and international distributors.
The company shall contract a truck and freight company to move the products from the company to the airport and from the airport to the distributors that shall then supply the small entities such as supermarkets, retail stores and shops where consumer will buy the products.
Operating in different market environments always present risks to an organization. A risk is a possible set of known and unknown outcomes in which one is undesirable (Covello & Merkhofer, 1993). Verge beverages currently face regulatory, supply chain and financial risks.
These risks affect the company due to the different laws which govern trade in various markets. The company faces stiff regulatory requirements when exporting the finished goods to various destinations, which require conformity to very low levels of sugar and product certification from international bodies.
Establishing an in-house quality management system and quality control checks that ascertain the product quality as per the standards required by the destination markets.
This is a risk affecting the company as a result of unseen financial exposures. It occurs due to changes in market exchange rates and fluctuation in freight charges.
The company mitigates this by exceeding its shipment and building warehouses in foreign export markets. It ships more products during off peak seasons where freight companies experience a shortfall in cargo thereby reducing their freight charges, while the company saves by maximizing its shipment.
Supply chain risks:
These are risks that the company faces in its supply chain system. They occur due to unfavorable weather at the airports and frequent strikes in the aviation industry, hence affecting replenishment of goods in foreign stores.
The company reduces this risk through contracting a private company that guarantees delivery to foreign markets. It also overstocks the products during off peak seasons thereby maintaining the optimum stock in the foreign stores.
Verge beverages face a bright future which can also be influenced as established.
Its consistent supply chain network
Considerable reputation in the healthy drinks segment in both local and international market.
Inability to sustain a motivated workforce due to wage conditions that impact on its financial capability.
Positive growth in the consumption of healthy diets reported in local and foreign markets.
A variety of flavors in its coconut water line of product
Competition from well established brands as a result of diversification into healthy drinks
Stiffer regulatory laws hampering its growth strategy limiting its penetration into newer market segments.
This document highlights the operations, potential risks and competitiveness of verge beverages. It establishes the various segments of its operations, strategies which it intends to use in order to meet its stakeholders goal.
Covey, S. R. (2009). How to develop your personal mission statement. Salt Lake City, Utah: Franklin Covey.
Covello, V. T., & Merkhofer, M. W. (1993). Risk assessment methods: Approaches for assessing health and environmental risks. New York: Plenum Press.
Menu trends: Non-alcoholic beverages U.S. 2015 | Statistic. (n.d.). Retrieved July 29, 2015.
Machado, R., & Cassim, S. (2002). Marketing for entrepreneurs. Lansdowne [South Africa: Juta.
Non-Alcoholic Drinks Market – Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2014 – 2020. (n.d.). Retrieved July 29, 2015.
Wass, J. A. H., & Stewart, P. M. (2011). Oxford textbook of endocrinology and diabetes. Oxford: Oxford University Press.