Beverage Industries

• The beverage industry consists of different segments with the first differentiation being locally consumed beverages versus packaged and shipped beverages. Locally produced and consumed beverages include fresh coffee, tap water, fountain drinks and freshly squeezed juice. Bottled water and beer are examples of packaged beverages. Packaged beverages consist of two types, retail and home produced. Retail Beverage Sales Retailing consists of the sale of drinks from a fixed location such as a convenience store, supermarket or bar in small or individual lots for direct consumption by the purchaser. A bar is an establishment that serves drinks, especially alcoholic beverages such as beer, liquor and cocktails for consumption on the premises. A supermarket is a self-service store offering a wide variety of beverages, food and household merchandise for consumers to take away before consuming or using. The February 2010 estimated monthly sales for retail and food services are, by sector: Food & beverage stores 49,888,000,000 Grocery stores 44,610,000,000 Beer, wine & liquor stores 1,473,000,000 Food services & drinking places 37,893,000,000 Water System Municipal tap water systems are among the biggest beverage industries in the world. Tap water is a part of indoor plumbing. It first became available in the developed world in the late 19th century and common by the mid-20th century. The delivery of tap water requires a massive infrastructure of piping, pumps and water purification works. Hoover Dam, a concrete arch-gravity dam in the western United States, is part of the tap water systems for several states. Consequently, tap water becomes a component of many of the packaged beverages as well. Soda and Bottle Water Production The US beverage manufacturing and bottling industry includes about 3,000 companies with combined annual revenues of $70 billion. Major beverage companies include Coca-Cola, PepsiCo and the Dr Pepper Snapple Group. The industry includes manufacturers and distributors of soft drinks and bottled water. Wholesale dollar sales of bottled water have steadily increased in recent years, reaching $6 billion in 2000 and $11.5 billion in 2007. Coffee, Tea and Kool-Aid After water, tea is the most widely consumed beverage in the world. In many places, the boiling of water for tea is a traditional method of reducing water borne bacteria. Coffee is a brewed drink prepared from the roasted seeds, commonly called coffee beans, of the coffee plant. The coffee cherries that yield the seeds grow on trees in over 70 countries. Besides coffee and tea, many other substances, from cocoa to Kool-Aid, can also flavor water. Beverage Packing and Labels In the $22.8 billion North American beverage market, the most popular packaging material is plastic with over 40 percent of the market. Bottles are the most popular packaging type with over 55 percent of the market. Experts predict that plastic as a packaging material and bottles as a packaging type will provide the vast majority of incremental sales increases of beverage containers over the next 10 years. Milk part of the Diary Business In 2007, cheese (41%) and fluid milk, cream and related product (23%) production accounted for nearly 64% of milk use. Butter accounted for about 18% of the milk supply, and about 8% ended up in ice cream and other frozen dairy products. Wine and Beer Production The US produces eleven billion pounds of grapes annually with a market value of $2.9 billion, making it the highest value fruit crop. California, a major wine producing state, has over 800,000 acres of grapes. Other significant grape producing states in order of production are Washington, New York, Michigan and Pennsylvania. Additionally, Americans consume over 200 million barrels of beer in the United States as well as liquor, port, sherry and brandy. More Ingredients Coffee, hops, syrup and lemon juice are all common ingredients in beverages. Many of the beverage industry s products, including bottled waters, juices, milk, sports drinks, teas and diet soft drinks promote health and fitness. Some of the key ingredients in non-alcoholic beverages include low-calorie sweeteners, high fructose corn syrup (HFCS) and caffeine. The basic ingredients of beer are water, malt, hops and yeast. The major variations in beer stem from the type of yeast used in the fermentation process. As water comprises more than 90% of beer, in the past the region from which the water came greatly influenced the specific flavor of final beer. Now in the United States, the highly filtered water removes virtually all of the local water taste. Beverage Transportation and Storage Some beverage transportation systems operate on regular routes or for only one consignee per run. Other systems transport goods from many different loading stations to various consignees. Generally, trucks carry beverages from the bottling plant to distribution warehouses for storage until needed. Beverage Brands A brand is one of the most valuable elements in advertising. The perception of the brand demonstrates what the brand owner is able to offer in the marketplace. Some of the top beverage brands include Coca-Cola, Pepsi and Budweiser. Some experts distinguish the psychological aspect of a brand from the experiential aspect. The brand experience is the sum of all experiential points of contact with the brand. Companies can establish a proprietary name by legally protecting it.