Innovation, sneaky marketing, growing product distribution, and expanding market shares make for some interesting stories and a good starting point in researching beverage and food companies Nestle (NSRGY -0.42%), Starbucks (SBUX -1.72%), and WhiteWave (WWAV).
Grabbing a piece of the coffee action
According to Beverage Daily, global food and beverage giant Nestle wants to bring the capsule based VertuoLine system to the North American household. The company wants to capture the "$5 billion portioned coffee market in the U.S." and steal a little thunder from Green Mountain Coffee Roasters, which commands 89% of the single-serve brewer market and 73% of the market for the pods used in such devices in the U.S. The VertuoLine brews large cups of coffee, which Nestle feels will serve as a major differentiator against its competitors. The price tag for Nestle's "game changing" machine is a little in the high range at $299. By contrast, you can easily find a Keurig machine for under $100.
Sneaking in like Napoleon
Starbucks isn't an official Sochi Olympic sponsor, but that hasn't stopped the company from infiltrating the huge Russian event, according to The Wall Street Journal. Starbucks established a secret place where NBC employees could enjoy a cup of Starbucks brew. This place "inadvertently" created a media buzz. The Starbucks facility wasn't available to the public and catered only to NBC employees, which doesn't violate Olympic rules and allowed Starbucks a private presence. The Journal quoted NBC's senior vice president of Olympic operation: "It's what Napoleon said: An army travels on its stomach." Maybe not so coincidentally, Starbucks wants to open a store in Sochi later in 2014. Russia currently plays host to 69 Starbucks.
Evolution Fresh on the move
Starbucks' line of Evolution Fresh vegetable and fruit juices, which are cold-pressed under high pressure in an effort to preserve taste and nutrients, recently expanded the product line into the Chicago area and the Midwest in general. Starbucks cited Datamonitor's global Consumer Survey's finding that 55% of people want to "eat as many vegetables as possible" as the reason for the product's appeal. According to the company press release, Starbucks plans to expand distribution of the product throughout 2014, giving the company and its shareholders another avenue of growth.
WhiteWave expands market share
The consumer hunger for all things healthy is driving stellar results for WhiteWave Foods, with adjusted revenue and net income increasing 10% and 24%, respectively, in 2013. WhiteWave's almond milk product line grew in more than 50% in the most recent quarter, according to the newsletter Food Navigator USA. WhiteWave now maintains North American market leadership in several product categories, commanding 64%, 53%, and 74%, of the coconut milk, almond milk, and soy milk categories, respectively. Also, WhiteWave's Horizon brand will expand into macaroni-and-cheese products.
Foolish takeaway
It's doubtful that Nestle's new VertuoLine machine will hurt Green Mountain Coffee Roasters that much. Consumers obviously love the K-Cup, as evidenced by its market leadership. Russians at the Sochi Olympics probably took note of the Starbucks coffee consumed by NBC employees and their friends as well as the subsequent media coverage. As a result, they may be more likely flock to the new store the company plans to open there later in the year. Starbucks, under the watchful leadership of its CEO Howard Schultz, will find creative ways to expand and new ways to satisfy the demands of the 21st-century consumer. WhiteWave's market leadership in the niche organic dairy and produce markets will likely translate into future gains for its shareholders. Feel free to add these companies to your Motley Fool Watchlist to learn more.
