How Coke Enters the Milk Market
Hypothesis:
Coca Cola should enter the milk market not through a brand name created by Coca Cola, but through acquisition of existing brand(s) of milk while utilizing its already strong distribution network to most profitably get its new milk products on the majority of store shelves in the US.
Issue Tree: * What is the market makeup for refrigerated milk in the US? * What is the market share of name brand milk (like Dean’s or Kemps) vs. private label (like Jewel or Target brand) * Who is the biggest name brand in terms of market share? And what is that market share? * Dean’s (or whatever the parent company’s name is) is the biggest name brand across the nation, what is the value of that company or operation? * Who is the company that own’s Dean’s? * What other businesses are they in? * What is the revenue breakdown of Dean’s? * What considerations should Coke think about when purchasing Dean’s from an operational standpoint? * Can they leverage Coke brand power in certain geographic areas to gain better access/distribution for Dean’s? * Should they operate the companies separately like how Gatorade operates separate from Quaker? * What kind of synergies could be expected? * What is the profit or cash flow potential of this transaction? * Could Coke spend this $XX BN somewhere else and be more profitable?
DATE: April 11, 2013
TO: CEO
FROM: Mike Lorenzen
SUBJECT: Coke’s entrance into the refrigerated milk market through acquistion
The refrigerated milk market in the United States is one of the interesting consumer products that is not dominated by one brand or another. It is a subset of the entire dairy industry in general that is comprised of butters, coffee creamers, yogurts, and other cream products. One of the key reasons for the lack of brand domination is the decentralized wholesaler system that is in place. According to IBISWorld,
Coca Cola should enter the milk market not through a brand name created by Coca Cola, but through acquisition of existing brand(s) of milk while utilizing its already strong distribution network to most profitably get its new milk products on the majority of store shelves in the US.
Issue Tree: * What is the market makeup for refrigerated milk in the US? * What is the market share of name brand milk (like Dean’s or Kemps) vs. private label (like Jewel or Target brand) * Who is the biggest name brand in terms of market share? And what is that market share? * Dean’s (or whatever the parent company’s name is) is the biggest name brand across the nation, what is the value of that company or operation? * Who is the company that own’s Dean’s? * What other businesses are they in? * What is the revenue breakdown of Dean’s? * What considerations should Coke think about when purchasing Dean’s from an operational standpoint? * Can they leverage Coke brand power in certain geographic areas to gain better access/distribution for Dean’s? * Should they operate the companies separately like how Gatorade operates separate from Quaker? * What kind of synergies could be expected? * What is the profit or cash flow potential of this transaction? * Could Coke spend this $XX BN somewhere else and be more profitable?
DATE: April 11, 2013
TO: CEO
FROM: Mike Lorenzen
SUBJECT: Coke’s entrance into the refrigerated milk market through acquistion
The refrigerated milk market in the United States is one of the interesting consumer products that is not dominated by one brand or another. It is a subset of the entire dairy industry in general that is comprised of butters, coffee creamers, yogurts, and other cream products. One of the key reasons for the lack of brand domination is the decentralized wholesaler system that is in place. According to IBISWorld,