Beverage Industry

The beverage industry includes manufacturers and distributors of soft drinks, bottled water, energy drinks, sports drinks, milk products, coffee and tea based products, nutritional drinks, and alcohol products. Some factors that influence the consumption of these products can include the time of day or other environmental situations, but consumer tastes, demographics and lifestyles are the engine that drives the demand for beverages. Large companies benefit from economies of scale in production and distribution. Small companies can compete by producing new products, catering to local tastes, or nimbly reacting to changes in the marketplace. The beverage industry is a huge part of our economy that affects many different sectors. Non-alcoholic beverages include a large variety of drinks, but sodas account for about 60 percent of the market. The manufacture and distribution of most national soda brands is a two-tiered process. The primary manufacturer produces syrup called concentrate, and local bottlers manufacture and distribute the finished product. The flavored syrup, corn syrup (as a sweetener), and filtered water are mixed in the right proportions, carbon dioxide gas is injected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged. The market for U.S. milk and dairy products, both domestically and internationally has been growing dramatically in recent decades. As a result, U.S. farm milk production has grown to about 190 billion pounds per year. Although milk is processed, it is not an engineered or fabricated food. It is about 87 percent water and 13 percent solids. The fat portion of the milk contains fat-soluble vitamins. The solids other than fat include proteins, carbohydrates, water-soluble vitamins, and minerals. Fragmentation occurs when many competitors jockey for dominance in a category. For example, the top 50 companies in the beer wholesale industry account for about a third of industry revenue. The wine and spirits wholesale industry is concentrated, with the top 50 companies account for more than 70 percent of industry revenue. Major alcohol products are beer, wine, and distilled spirits (hard liquor). Distributors tend to specialize in either beer, or wine and spirits. About half of overall industry revenue comes from the sale of beer, 30 percent from liquor, and 20 percent from wine.

Drink Flavors

Consumer preferences have become increasingly complex. This is especially true in the beverage industry, where there is an ample offering of products, each with differing flavor profiles. Research and development teams work diligently to stay on top of consumer trends. Beverage industry experts have a library of flavors that address cultural preferences. A drink flavor that is very popular in Japan may not successfully penetrate the United States marketplace. Relying strongly on sensory research, the beverage industry employs teams of scientists, food specialists and taste testers who experiment with drink flavors to find those best suited to meet the needs of varying demographics. Taste, smell and texture are some of the more important attributes that testers analyze and rate. All ingredients in drink flavors and formulations must meet FDA guidelines and regulations. Beverage industry experts will be aware of these requirements and will make sure that products meet these guidelines. Qualified beverage experts will also be aware of international regulations and ensure products comply. When working with beverage flavors, modifiers enhance the taste of a beverage while other agents mask unpleasant tastes often associated with vitamins, herbs or other ingredients. By using the right mix of beverage flavors and natural ingredients, developers can balance taste profiles and health benefits. Developers use natural and artificial flavorings together to achieve a desirable flavor profile for a drink. Natural ingredients are those whose flavoring originates from a natural source such as a vegetable, fruit or raw animal materials. A laboratory synthetically produces artificial flavorings. Shelf life affects the formulation of beverage flavors. A shelf-stable beverage may not require refrigeration but its ingredients can affect its shelf life. Some beverage flavors require refrigeration to preserve quality and flavor. Drink flavors can be complex, combining many ingredients to produce a product that delivers a favorable sensory experience.