Cold Pressed Juices Market

Michael Porter’s Five Forces model gives a framework that models the global cold pressed juices market, which is influenced by five forces. The strategic business managers, trying to create an edge over competitive firms in the global cold pressed juices market can utilize this model to better comprehend the industry connection, in which the firm operates. The components of each of the forces and the degree or impact of each component in the context of the global cold pressed juices market have been broken down and analyzed.

Threat of New Entrants

Economies of Scale: Cold pressed juices business is highly competitive and huge. Major Key players have their prominent presence across the globe, which makes the market highly competitive. The initial investments in the cold pressed juices market are high including the raw material costs, certification cost, and approval from the regulating bodies.

Also, the revenues are high considering the increasing demand from the consumers end. Production costs of cold pressed juices are identified to be high because of high investment in production equipment, skilled labor inputs, maintenance cost, and safety testing & certification.

Additionally, cold pressed juices market is dominated by established players in the market and to enter the market, new players need to invest enormously to create their brand identity through strategies such as high R&D investments and by creating product differentiation.

Based on this, the threat of new entrants to the global cold pressed juices market is high.

Threat of Substitutes

Availability of Substitutes & Ease of Substitution: There are only limited substitutes cold pressed juices available in the market, which primarily includes fresh juices. However, there alternatives are moderately not preferred due hygiene concerns and requires efficient processing parameters, which in-turn lowers its demand. Cold pressed juices have unique product characteristics; hence the substitution effect is moderate. Also, the substitution ease is very limited, and needs to undergo stringent regulatory parameters, which makes the substitution process relatively difficult.

Hence, the threat of substitute in the global cold pressed juices market is low.

Bargaining Power of Buyers

The bargaining power of buyers is directly proportional to the economic development. The bargaining power includes the pressure, that consumers exerts on businesses to procure higher quality products, better customer service, and lower prices.

Number of Customers: Cold pressed juices have a large customer base owing to its specific characteristics, despite of large customer base, the buyer power is limited in the cold pressed juices market. The number of consumers of cold pressed juices in the global market is high. Additionally, growing consumer awareness and high demand for superior quality beverages in the North America & Europe region has raised the demand in these regions. Increasing population and urbanization will ensure escalation in the demand for cold pressed juices.

Switching Cost of Consumers: The presence of large industrial players in the global cold pressed juices market has attracted a huge consumer base. Due to large number of existing manufacturers in the market, the switching cost of consumer falls. Furthermore, the presence of variety among the product range tends to decrease the switching cost. The consumers are well-educated about the product and they no longer have brand loyalty, which determines the bargaining power of buyers.

The bargaining power of buyers is moderate in the global cold pressed juices market.

Bargaining Power of Suppliers

Suppliers for cold pressed juices are the conventional fruits & vegetable growers, organic producers, distributors, importers and independent suppliers. Due to the availability of high count of competitors across the geographies, the suppliers have low bargaining power.

The Uniqueness of Suppliers: Cold pressed juices are available in different flavors, packaging format, and blends, depending upon the processing steps adopted by the manufacturers. Unique capabilities of suppliers for cold pressed juices enhance the supplier’s power.

Suppliers Control Over Prices: The bargaining power of suppliers is low to moderate since the supplier group is widely spread across the globe and the vendors try to go up with long-term agreement with the suppliers to maintain consistency in the quality and to ensure un-interrupted supply of raw material.

Therefore, the bargaining power of suppliers is low in the global cold pressed juices market.

Competitive Rivalry

Number of Competitors: The market is dynamic with the presence of many established as well as local players. The players in the market are competing based on new product launches, cost, and marketing activities. The competition is getting intensified due to large number of industrial players operational in this industry.

The Capacity of Competitors: Market players in the cold pressed juices industry have high production capacity and focus on strategic investments in R&D. However, the demand of cold pressed juices and the number of end-users has shown an exponential growth from last few years, this is likely to support the further growth of this market.

The cold pressed juices market has high intensity of competition due to existence of large number of competitors. This market is significantly growing, and manufacturers want to increase the production volume. Also, they are involved in capturing greater market share.

Hence, the competitive rivalry in the global cold pressed juices market is high.