Territorial Exclusivity the Soft Drink Industry
by Barbara G. Katz
Off-campus link for NYU students/faculty/staff
Abstract
BETWEEN 1950 and I970 soft drinks in the
United States more than doubled their share of the commercial beverage market,
constituting about one-fifth of the latter in 1972, and by 1969 ranked second
only to coffee in commercial beverage popularity. By 1970 soft drinks were
available in more than 1 million domestic retail sales outlets and yearly per
capita consumption reached 388.1 8 oz containers. The wholesale value of soft
drink sales in that year was $5.3 billion.
Part one of this paper provides a
background description of the market structure of the soft drink industry. Part
two examines reasons why syrup manufacturers find territorial exclusivity
desirable and evaluates the implication of these exclusive arrangements for
market performance.