IB Business Management SLTopic 8 — The Pre-Released StatementPaper 1Industry context~12 min read
Background on the Industry
Myt now competes in three markets at once: fizzy drinks, bottled water and, possibly, healthy snacks. They are growing at similar rates but they are very different sizes, and each one carries a different problem. Knowing which problem belongs to which market is what separates a specific answer from a vague one.
What you need to know
The global soft drinks market was worth roughly $465 billion in 2024, growing at around 5.6% a year.
The global bottled water market was worth about $336 billion in 2024 and is forecast to grow faster in absolute terms than soft drinks.
The healthy snacks market is much smaller, around $91 billion in 2024, but growing steadily.
The big three in soft drinks are Coca-Cola, PepsiCo and Keurig Dr Pepper. Coca-Cola held about 17% of global retail volume in 2024.
Traditional fizzy drinks are declining while functional and low-sugar options grow.
Every one of these markets has a packaging and plastic problem.
Three markets, three sizes
Forecast years differ by source, so treat these as scale rather than precision. The point is the relative size, not the decimal place.
The soft drinks market
Big, mature and changing shape. Growth is running at roughly 5.6% a year, but that headline hides a split: traditional fizzy drinks are under pressure while healthier and functional options grow.
Who competes
The market is dominated by Coca-Cola, PepsiCo and Keurig Dr Pepper, whose brands include Pepsi, Dr Pepper, 7Up and Snapple. Coca-Cola held about 17% of global retail volume in 2024, keeping its lead. Myt, with over 30 drinks, is a serious player but not one of the giants.
What consumers are doing
Energy drinks and bottled water are leading growth, reflecting a shift towards health-focused choices.
Prebiotic sodas that claim digestive benefits have grown quickly, with brands such as Olipop and Poppi gaining attention. Coca-Cola has responded with its own prebiotic line.
Traditional carbonated drinks face criticism over sugar content and artificial additives, and consumption has been falling.
The pressures
Sugar taxes are spreading. Some governments are looking at ingredients such as high-fructose corn syrup, which could force reformulation across the industry. Plastic use is under constant scrutiny. Meanwhile input costs — raw materials, packaging, transport — have been rising, squeezing margins.
Emerging markets matter. Growth is not evenly spread. Reliance Consumer Products, part of India’s Reliance Group, launched its Campa Cola brand into the United Arab Emirates to reach Indian expatriates and local consumers in a market worth roughly $1 billion. New regional entrants like this are a real competitive threat to established multinationals.
The bottled water market
Worth around $336 billion in 2024 and growing at roughly 5.35%. The drivers are health awareness, worries about tap water quality in some regions, and the convenience of grab-and-go hydration.
The market is led by Nestlé (Perrier, San Pellegrino, Vittel), Coca-Cola (Dasani, Smartwater) and PepsiCo (Aquafina). Honest Water therefore puts Myt up against very well-resourced competitors.
The premium shift
Consumers are trading up. The premium segment was worth about $38.6 billion in 2024 and is growing faster than the market overall, at roughly 6.7%. Spring water in particular reached around $10.2 billion. Perceived quality is doing the selling.
Three problems specific to water
Problem
What happens
Why it matters for Myt
Plastic
Producing and disposing of bottles causes pollution and emissions. In 2024 Los Angeles County sued major bottled water companies over claims about how recyclable their plastic really is.
Honest Water exposes Myt to exactly this criticism, and to legal risk over any recyclability claim it makes.
Water extraction
Taking large volumes of groundwater can affect local supplies. In 2024 there were reports of firms extracting billions of litres from UK aquifers for bottling.
An ethical and reputational risk that does not exist in fizzy drinks to the same degree.
Contamination
Safety incidents damage trust quickly. In 2024 Perrier destroyed over two million bottles after traces of fecal matter were found at one of its source springs.
Shows how fast a water brand’s reputation can collapse, which is a real risk of acquiring one.
This is the most useful counter-argument in the whole case. Myt bought Honest Water partly to look healthier and greener, and bottled water carries some of the industry’s worst environmental criticism. Point that out and your evaluation stops sounding rehearsed.
The healthy snacks market
Around $91 billion in 2024, forecast to reach roughly $147 billion by 2033 at about 5.19% a year. Growth comes from busy lifestyles, urbanisation and demand for food that is both convenient and nutritious.
Who is already there
The established players are substantial: General Mills (Cheerios, Nature Valley), PepsiCo through Quaker, Nestlé, Unilever and Kraft Heinz with brands such as Planters. Myt would be the newcomer.
The trends
High-protein snacks such as protein bars and nuts.
Plant-based snacks made from lentils, chickpeas and similar ingredients.
Gut-health snacks, mirroring the prebiotic trend in drinks.
Low-carb and keto-friendly options such as cheese crisps and nut-based bars.
The difficulties
Three keep coming up. Balancing health with taste, because consumers want both. Sustainability pressure on sourcing and packaging. And regulatory complexity, since health claims and ingredient rules differ between countries — a real headache for a multinational.
WORKED EXAMPLE
Describe two possible risks to Myt of entering the healthy snacks market. [4]
Risk 1
Strong existing competition [1]. Large food companies such as General Mills, Nestlé and Kraft Heinz already have established snack brands and shelf space, so Myt would need heavy marketing spend to be noticed [1]
Risk 2
Operating outside its expertise [1]. Myt manufactures drinks, so moving into food means new production methods, new suppliers and new food safety regulations in every country it sells in [1]
4 marksDescribe wants two risks set out with detail. Naming actual competitors is what makes it specific.
WORKED EXAMPLE
Explain one reason why bottled water may be a good market for Myt to be in, and one reason why it may not. [4]
For: the point
Bottled water is growing quickly as consumers move away from sugary drinks towards healthier options [1]
For: the applicationHonest Water gives Myt an immediate position in that growth, which balances the decline in its high-sugar fizzy lines and supports its healthier image [1]Against: the point
Bottled water attracts heavy criticism over plastic waste and over how much groundwater producers take [1]
Against: the applicationSince Myt is already under pressure from health and environmental groups, owning a bottled water brand could add to that criticism rather than reduce it, and legal action over recyclability claims has already hit others in the industry [1]4 marksBoth halves come back to Myt’s own situation. That is what turns industry knowledge into application.
Exam tip
Learn one number per market. Rough size is enough; nobody needs the decimals.
Name real competitors. Coca-Cola, PepsiCo, Nestlé, General Mills. It costs three words and reads as informed.
Match the problem to the market. Sugar taxes are soft drinks; groundwater is bottled water; regulation is snacks.
Use the case study’s own figures if the paper gives you any that differ from these.
Remember snacks is the smallest market. It is also the most crowded, which is the point of the question.
Keep the plastic problem for CSR answers. It applies across all three markets.
Common mix-up
Assuming bottled water is the “green” option. It carries some of the industry’s worst environmental criticism.
Thinking healthy always sells. Consumers want health and taste, and taste usually wins.
Treating a growing market as an easy market. Growth attracts competitors and heavy marketing spend.
Quoting industry figures instead of the paper’s. Exam data always beats revision data.
Ignoring emerging market entrants. New regional brands are a genuine threat to multinationals.
Confusing the markets. Each has its own problem, and mixing them up shows you have not read carefully.
Up next: Practice Questions to Try — a full set on the Myt statement, with worked answers.
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