The History of the Beverage Industry (Part 4): How Bottled Water Changed the Industry

Bottled Water History

Fred Sipper outside Irving’s Food Center and on the TV Guide cover

What about Bottled Water?

Unlike sports drinks, bottled water has a much longer history. Even though we humans started transporting water in vessels since the dawn of the first civilizations, bottling of it started much later in the early 17th century. The craze for bottled water in the United States started much later, though, in the 1970s.

In 1621, the first bottling of water began at the Holy Well in the United Kingdom. It was a humble beginning in one bottling plant. That doesn’t exist anymore, but the Malvern water from the springs in this area is still bottled to this day.

The practice started in the UK, then spread across Europe and subsequently to North America during the 1700s. The method gained in popularity as natural springs are believed to have many healing properties. Even though it was popular, bottled water only started being commercially distributed in 1767 by Jackson’s Spa in Boston. All the while, bottled water was mostly created and sold as a medicinal remedy by pharmacists.

In the 1800s, technological innovations allowed for some improvements to the practice. These mostly consisted of cheaper glass bottles and significantly faster bottling. Thanks to this, bottled water grew in popularity even more.

The popularity of bottled water in the 20th Century somewhat declined, especially in the US. This was mostly due to the invention of water chlorination, which reduced the dangers of drinking water available from the public supply. However, bottled water still persisted in Europe, and in the 1970s, became popular again.

A bottle of beer on a table

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Perrier

In the mid to late 1970s Perrier managed to position itself as the ‘Earth’s First Soft Drink’, thanks to Bruce Nevens and James Stevens, the first US CEO and VP Marketing respectively (and later the inventors of Chipwich Ice Cream Sandwiches). Perrier started bottled water’s commercial dominance. Perrier is now known throughout the world for its high level of carbonation and especially for its distinctive green bottle. It’s now owned by Nestlé.

But back in the day, a retailer named Fred Sipper, whom Smithsonian Magazine once called the “King of Bottled Water”, started selling Perrier in his small grocery store in New York City in 1960 called Irving’s Food Center.  At the time, though what was to become a revolutionary idea, started out as a ploy to attract more consumers to his supermarket. Irving’s Food Center had a lot of European customers, especially French clientele, and his tactic worked.

Fred first purchased cases at a time.  Then he started running full page advertisements in The New York Times to promote Perrier and Irving’s Food Center. He began purchasing and selling pallets of Perrier and then overseas containers from France.  Unfortunately, the grocery store was too small to handle that type of volume and he opened a warehouse and a new wholesale distribution company called Mootch and Muck, affectionately named after his parents’ nicknames for one another.

Irving’s Food Center NY Times Ad

Bruce Nevens and Jim Stevens were great marketers, constantly looking to cater to the upscale NYC clubs, restaurants, and hotels, etc.

Bruce Nevens and Jim Stevens, Perrier

The business grew and Fred added other bottled water brands including Evian, San Pellegrino, Poland Spring, Mountain Valley, Aqua Panna, Contrexevelle, Badoit, Apollinaris, Gerolsteiner, Ferrarelle (to be re-launched in the United States by Evian in 2020) and many more.  He eventually convinced the major and many minor retailers, as well as the trendy restaurants and clubs to sell the first bottled waters in New York and New Jersey.

Perrier, Evian, Pellegrino

Fred opened his first warehouse to distribute bottled water in the mid 1970s.  The first warehouse was 1000 square feet and housed mostly Perrier.  The second warehouse opened in 1982 and was 35,000 square feet; the next a 60,000 square foot warehouse on Grand Avenue, and then 100,000 square feet in 1985 in Williamsburg, Brooklyn.

From 1976-1988 Fred was the exclusive Evian distributor for the NY ADI. Mootch and Much was also the first Vitamin Water distributor and shared the exclusive distribution rights to San Pellegrino with a food service distributor.

In came Jack Maguire, a savvy former Vice President of Canada Dry, and the first CEO of Evian USA, then called Great Waters of France.  Jack was a great marketer and teamed up with Fred to create the largest bottled water empire in the USA for many years. In fact, Fred and Jack participated and sponsored the NYC Marathon and catered at first to runners.  Both would run in Central Park at mid-day together to train for the event in pink Evian shirts and sweats, and of course always with a bottle of glass Evian, there was no plastic at that time in their hands.

Jack Maguire, CEO Evian and Fred Sipper, CEO Mootch and Muck

Fred developed the first bottled water program where he would visit the swankiest upscale restaurants, hotels, and clubs in Manhattan.  His first questions was, “how much money do you make on the free bread you give out?  What about the free tap water you serve with ice that you pay for?”  They soon began to realize that a bottle of Evian at the table could add 15% to their checks.  Fred would also interview the wait staff and initiate his Evian Waiter Program which consisted of training the waiter to convince their customers to buy Evian so that their tips would increase by at least $1.00 per client, if their customer only bought one bottle.

He made an arrangement to meet with all the waiters and outlined his program: 1) When the customer sat down, there would be a bottle of Evian on every table. 2) No glasses of tap water were visible. 3) and if they convinced the client to buy the Evian their tips went up. Since the average waiter would wait on more than 30 tables per night, he or she would earn an extra $30 per night.

He also advised them about the Evian Mystery who would unknowingly have dinner in their restaurant during a defined period of time.  If the waiter even mentioned Evian, the waiter would receive $100 on the spot.

Simultaneously, he convinced chain store buyers to create the first bottled water sections in their stores.  He offered a free fill for every inch of space they gave them.  And if the product didn’t sell, at the end of the month he promised to purchase any unsold merchandise at full retail price. The result: He never had to buy back any bottles.

Food Emporium’s Buyer at the time, Dan Portnoy,
worked with Fred to launch their Bottled Water Spectacular, a one week bottled water promotion four times per year

Fred and Jack convinced Marvin Taub at Bloomingdales to display Evian in their stores and sample consumers in high end departments like fur and expensive women’s clothing. Taub wanted a 60 day exclusive when the plastic Evian bottle was introduced.  The three parties agreed and then Fred pre-sold all of the city’s supermarket chains leveraging the distribution in Bloomingdales.

To this day and since 2000, Fred consults for the second largest online distributor, second only to Amazon, of non alcoholic beverages, Beverageuniverse.com.  He still seeks new bottled waters daily to add to the 290+ kinds and sizes Beverage Universe stocks.

But I digress…and it is time to re-focus on the earlier history.

The Origins of Schweppes and Carbonated Bottled Water

One would think that this is all there is to bottled water, but there’s more to it. In 1783, a Geneva man called Johann Jacob Schweppe developed a process for the manufacturing of bottled and carbonated mineral water. He also founded the now-known Schweppes company that started selling his carbonated water.

This changed the game for the bottled water industry. It was the first time people came into contact with soda water, sparkling water, or seltzer water as we know it in the United States.

Even though Schweppes started the bottling of carbonated water, that water itself had been accidentally developed by Joseph Priestley some 16 years earlier. He discovered that it was possible to imbue water with carbon dioxide. He drank his concoction and later wrote about the unusual satisfaction he gained from drinking it.

Later on, in 1809, bottled carbonated water started gaining popularity in the US as well. Joseph Hawkins got a patent for producing imitation mineral water. As the decades passed, bottles of carbonated water were being sold in the millions.

Evian, Badoit, and Volvic

Bottled Water Market and Its Effects

In the 1970’s few people knew about bottled water. However, they started to buy it in droves as negative reports about US water supply surfaced and trendy discos like Studio 54 and restaurants like Elaine’s and clubs like Regines started selling Perrier.

After Perrier took the market by storm, Mootch and Muck added San Pellegrino and Evian to its distribution trucks to build all 3 bottled water brands in the Metro New York area.  Poland Spring soon joined along with Calistoga, Arrowhead, Badoit, SPA, and other pioneers.

Mountain Valley, Contrex, Evian Trade Ad, Perrier Trade Ad

More and more consumers switched from Perrier to non-sparkling waters like Evian and their usage occasions increased.  Evian was in fact the first bottled water company to introduce their products in plastic bottles.  Once this occurred the bottled water industry exploded.  Competitors followed suit using plastic bottles.  And sales have continued to increase for every year since the late 1970s.

Evian Plastic

Today, centuries after the first bottled water was produced, the entire market is worth around $200 billion and is expected to reach $330 billion by 2023. The enormous growth of the market is being spearheaded by many conglomerates bottling and selling mineral water and carbonated water, thus easing public concerns across the globe about the safety of tap water.

Market Watch

In 2012, the US annual consumption of bottled water reached 9.67 billion gallons (36.6 billion liters) or 30.8 gallons (116.6 liters) per person. As for the world, global consumption reached 300 billion liters or 79.2 billion gallons in 2014.

The consumption of bottled water varies from place to place, and it mostly has to do with how safe tap water is in the area. Bottled water is also used in emergency responses when disaster strikes. However, on the other end of the spectrum, it is critiqued for its negative effect on the environment. The usage of plastic bottles is mainly blamed as plastic has a massively negative impact on the environment. Despite that, most companies still use plastic bottles because it’s much cheaper than glass.

Nestle has become the number one bottled water company in the world.  They now own Perrier, San Pellegrino, Poland Springs, Arrowhead, Calistoga, Ozarka, Deer Park, Zephyrhills, Aqua Panna, Vittel and their filtered water brand under the Nestle Pure banner. DANONE now owns Evian, Volvic, Badoit, and more.  Coca Cola owns Dasani and Smartwater and Pepsi Cola owns Aqua Fina. Keurig owns CORE.

NY Times Article About Bottled Water
Pepsi H2OH Article

Key Takeaways

Bottled water is now consumed across the globe, with its own distinctive history. Bottled water is a major player in the beverage industry, and its scope is still growing exponentially.

The entire beverage industry continues to evolve, and it is worth the while for every aspiring beverage entrepreneur to stay in touch with the industry insights, as well as to turn to historical takes like this one for clearer perspective. By doing that, you will be better-positioned to create a new shakeup in the industry.

Darius Bikoff’s Precursor to Smart Water and Vitamin Water

For more information about Cascadia Managing Brands please visit our website.

The History of the Beverage Industry (Part 3): Which Brands Furthered the Evolution?

Snapple

In the previous articles on the history of the beverage industry, we discussed the origins of carbonated soft drinks and their further development. We also covered the new age craze for fruit juices and ready to drink tea, two types of beverages that are still quite popular today.

Now, I am going to cover the formation and development of sports drinks and bottled water. Both have a significant influence on the beverage industry and are still going strong today, especially bottled water, without which some people can’t live.

The Strange Beginning of Beverages for Athletes

In part 2 of the series, we briefly touched on New Age Beverage called Snapple. However, the origin of sports drinks goes much further back in history, as far as the 19th century. Back then, it wasn’t known what kind of beverage could help athletes perform better and replenish their energy when needed.

Some athletes were used to drinking beer (yes, beer), but with significantly lower amounts of alcohol. It was thought that low alcoholic content could replenish water, minerals, and energy in our bodies. But back then, they didn’t have the benefits of modern studies we have today. We take our sports drinks and our electrolyte water for granted today, but in the early 19th century, they had to make do with what they could.

Lucozade – the First Sports Drink

It wasn’t until 1927 when the first real sports drink was developed and launched. It was dubbed ‘Glucozade,’ but shortly after changed to the less tongue-twisting and more catchy ‘Lucozade.’ Barely a century later, the sports drink industry is worth more than $4.6 billion. But let’s not rush into things, as we are still far from the billion-dollar industry we have today.

A British pharmacist from Newcastle, named William Walker Hunter developed Lucozade in 1927. It wasn’t considered to be a sports drink at that point, but a medical aid drink for athletes. It was a pure glucose and water mixture that was made to provide a natural source of much-needed energy for athletes. The rights to the drink were sold in 1938 to the famous Beecham Group, which was the first to truly commercialize and mass-produce it. Beecham Group was also the company that changed its name to Lucozade.

The first Lucozade only had one flavor – a distinctively sweet one with citric overtones. It was sold in a yellow cellophane wrap until the 1980s when it was rebranded once again. Their first slogan was ‘Lucozade aids recovery.’ When they rebranded in 1984, the bottle was changed to a classic plastic one, like those used for most beverages today. The more significant change was a marketing one. The company only marketed the product as a beverage for the sick, instead of a drink that can replenish energy.

The sales then tripled, and the company was sold later in 1989 and once again in 2013 to the Japanese company Suntory for £1.35 billion. Today, Lucozade is the number one sports drink in the UK.

A Stronger Player Enters the Market

Despite its relatively high success as a medical product, Lucozade missed the real success it could have had. The sports drink market was just emerging, and it was another product that took it to new heights – Gatorade. Today, most people across the globe have heard of Gatorade, but not many can say the same for Lucozade.

All in all, Gatorade started in 1965 and it essentially created and quickly dominated the new market of sports drinks. Even though Lucozade started it all, it was considered a medicinal drink all the way to the late 1980s when they first rebranded their drink as a sports beverage.

Gatorade, on the other hand, was envisioned by coach Dwayne Douglas as a sports drink that could help the University of Florida football players. He noticed that they tended to lose weight from training and playing. They were urinating less even though they drank lots of water, and they also suffered from heat strokes on occasions. To help them, coach Douglas decided to join forces with a kidney disease specialist from the University – Dr. Robert Cade.

The doctor realized that he only needed to add sugar and salt to the water to help athletes replenish the energy they lost when playing. His drink was mostly the same as Lucozade, but it contained less sugar and some salt – which Lucozade didn’t have. The drink Dr. Cade made didn’t taste good, so his wife suggested adding lemon juice to make it more appealing. That made all the difference in the world, and the now-famous drink was made. It was named Gatorade because it was essentially created for football players at the University of Florida – the Gators.

So, the drink was made and given to the Gators in 1966. They immediately started performing better, lost less weight, and had fewer problems with the heat. The drink started being distributed by the Stokely-Van Camp Co. but was subsequently acquired by Quaker Oats in 1983. Later in 2001, Quaker Oats was purchased by Pepsi, and with the purchase, they gained all the rights to Gatorade.

Other Players on the Market and What Makes All of Them Successful

Body Armor Representatives

Lucozade marked the beginning, Gatorade started the craze, but other sports drinks also contributed to the massive expansion of the entire market. Coca Cola has its own version called Powerade. Then there’s California-based Muscle’s Milk, Aquarius from Coca Cola, the global Herbalife, Pepsi’s All Sport, and Japanese-based Pocari Sweat to name a few. More recently the phenom Body Armor was successfully launched by beverage entrepreneurs Lance Collins and Mike Repole.  Coca Cola recently purchased a minority interest in the Company and will distribute it in the United States, somewhat sidelining their other sports drink entry, Powerade.

The success of all of these different brands lies in the mixture that was primarily created by Dr. Cade. Naturally, it was refined by many of the previously mentioned companies and brands, but the basic concept remains the same.

Almost every sports drink is a blend of electrolytes and carbohydrates. Virtually all of the carbs come from sugar, which is much needed for muscles. Electrolytes are usually a mixture of salt and potassium, and they replenish everything you lose through sweating. Outside of that, most sports drinks contain some flavors and colors to make them tasty and appealing to larger masses.

The Health Benefits and Problems

It’s vital to note that sports drinks can be useful, but not always. First of all, they contain a lot of calories; a large bottle of Gatorade has around 200 calories, which can often be a lot more than you can burn during a workout.

What’s more, many scientists state that if you’re not exercising for more than 90 minutes, then there’s no need to consume a sports drink at all, because in these cases, your body doesn’t require more sugar and electrolytes. Thus, it stands to reason that the Gators initially benefited from Gatorade because they trained and played for much more than an hour and a half.

For these reasons, sports drinks are often marketed as soft drinks. They contain less sugar than regular soda, but they still contain an amount that your body rarely needs if you’re following healthy nutrition every day. They are more beneficial for athletes who undertake rigorous and longer training sessions, not for people doing regular exercise.

The sports drink market is projected to grow at a CAGR of 4.31% to reach US $28.584 billion by 2023, from US$22.193 billion in 2017.  “Growing health awareness including the importance of hydration in the human body is one of the major drivers driving the growth of the global sports drink market. Popular brands include Gatorade, Powerade, Staminade, Jianlibao, Pocari Sweat, Maidong (Vitamin Water), All Sport and 100Plus among others” according to Research and Markets.

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The History of the Beverage Industry (Part 2): Which Brands Furthered The Evolution?

Vintage Soda Brands

I find myself writing part two of the History of the Beverage Industry and wondering, “geez, how many parts will I have to write?”.  I blame all of this additional work on Jim Tonkin @healthybrandman who was underwhelmed by my previous beverage history contribution several months ago! J

When we left you last, we discussed the evolution and history of the non-alcoholic beverage industry, essentially, the birth of the carbonated soft drinks.  Today, we are going to discuss what came next and the eventual boom of “new age” or “good for you” beverages and the levels and platitudes these brands created.

What about Fruit Juice?

Sodas aren’t the only non-alcoholic drinks that have had a lightning-fast rise to fame, impeccable reputation for improving health, and a similar downfall. There is, of course, fruit juice, especially the ready to drink kind that has ended up being the most widely consumed. 

Much like soda, fruit juice was also a somewhat healthy-looking concept in its inception, although it has been around for much longer in a non-commercial iteration. There are different definitions of juice, depending on whether you’re looking at the American or British market terminology and regulations. However, fruit juice is essentially a drink made by extracting a fruit’s natural liquid.

As such, it was referenced as early as 100BC-70BC, according to Steven Bailey’s Juice Alive: The Ultimate Guide to Juicing Remedies. It’s safe to say that all ancient civilizations had their own preferred fruit juice combination. However, fruit juice as a commercial product came onto the market much later, around the same time that soda drinks did.

There are several definitions of “fruit juice”:

  1. 100% Fruit Juice, which as its name states, must contain 100% fruit juice.  However, in the mid 1980’s and 1990’s, manufacturers blurred the lines by using very little “named fruit juice” (the name of the fruit juice they are featuring) and started adding apple juice, pear juice, and white grape juice to fill the definition of 100% juice.  We call them fillers because they are essentially used like cheap sweeteners, without adding sugar itself, and have little or no nutritional value.  You can actually taste when a juice brand is using these fillers.
  2. Juice Cocktails are another advent.  Must juice cocktails contain about 10% or more fruit juice, but usually far less than 100% juice.  Many don’t exceed 155 or 20% juice. They are often sweetened with high fructose corn syrup (besides cost, does anyone know why the industry would ever use a this horrible sweetener? —but I digress), cane sugar, Stevia, Erythritol, Monk Fruit, and even artificial sweeteners. Some contain natural and/or artificial flavors or colors.
  3. Juice drinks contain absolutely no fruit juice whatsoever, but are sold as Juice “drinks”, which is fairly misleading. If you drank these as a kid, guess what?  No juice whatsoever.
Remember these? Again, I digress.

The main obstacle to selling freshly produced juice is, of course, its short shelf life — but that changed in 1869 when Thomas Branwell Welch pasteurized fruit juice. Welch was a physician and dentist, religiously against the manufacturing, selling, and consuming of alcoholic beverages. This moved him to come up with a way to halt fruit juice’s fermentation to alcohol, which effectively created the first ready to drink juice.

Welch named his unfermented grape juice Dr. Welch’s Grape Juice, which his son Charles later renamed to Welch’s Grape Juice. Dr. Welch then began advertising it as a remedy to all chronic diseases “except Diabetes Melitus.” The drink was hugely successful until the 1920s and the Prohibition, which saw the rise of soda. However, Welch’s Grape Juice survived those hard times, and it paved the way for other ready to drink juice brands.

The Orange Juice Craze

Another juice craze that would grip America originated from the need of the government to provide a transportable Vitamin C product to their troops during World War II. Back then, canned orange juice was the only option on the market, and scientists were tasked with coming up with something that is transported more easily. That is how frozen concentrated orange juice came to be — three years after the end of World War II. 

However, the problem with both concentrated and pasteurized orange juice is that the process of creating it removes the juice’s natural flavor. That means that some of it has to be put back into the product via the so-called flavor packs — and they are full of additives. For the longest time, these juices were marketed to consumers as a natural, healthy option, but they, in fact, are not.

Despite not being a ready to drink option, frozen, concentrated orange juice kicked off the trend. But by the 1980s and 1990s, the industry had reconstituted ready to serve orange juice and “not from concentrate” orange juice. These inventions turned it into a quintessential American breakfast drink, and fruit juice became a way of life for consumers over the next few decades.

The History of Ready to Drink Tea

On the other hand, a product that is seeing a worldwide increase in sales is ready to drink tea. This industry had humble beginnings as well, starting with the first commercialization of iced tea back in 1904 when English merchant Richard Blechnynden cooled his pre-made tea with ice in an effort to sell it in the sweltering heat of the Louisiana Purchase Exposition. The U.S. had known iced tea before, as there are some Civil War-dated references to it. However, the market didn’t really boom until the ‘90s.

Going National

In 1993, ready to drink teas went into nationwide production and distribution, offering a wider range of products than ever before. The industry that started with black tea based products expanded to different branches such as juice blends, unsweetened iced tea, and diet iced tea. The brands that carried the evolution of ready to drink tea were Arizona and Snapple, starting with bottled and canned tea.

Leading Ready to Drink Brands

Snapple Founders

Snapple and Soho Soda and a small handful of others created the New Age Beverage Category by first launching gourmet juices, then natural sodas and seltzers and then ready to drink iced teas. Lipton and Nestea were already making iced teas, but they contained artificial ingredients and were mostly in cans. Additionally, Snapple was one of the first independent beverage companies to bottle their products in a custom, proprietary bottle. The other company to do that at the time was Soho Soda, one of the first natural soda brands.

A bottle of wine

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Snapple began as a joint venture of Arnold Greenberg, Leonard Marsh and Hyman Golden in 1972. Envisioned as a carbonated fruit juice, the first iteration of Snapple exploded in the bottles after fermenting, which earned it its name. A few years later, they produced a ready to drink iced tea, bottling the tea while it was hot. That way, they eliminated the need for additives, which reinforced their all-natural, homemade marketing angle.

After having grown throughout the 80’s, Snapple was sold in 1994 to the Quaker Oats Company for $1.7 billion, which also owned Gatorade, a sports drink invented in the 70’s to help the Florida Gators football team performance. Quaker Oats intended to maintain the popularity of Snapple by implementing strategies similar to what they used with Gatorade, but it didn’t work. With bigger bottles and a lack of charismatic company employees like Wendy Kaufman who carried Snapple’s marketing campaigns, the brand lost a lot of its appeal for consumers. Just 4 years later, Quaker sold Snapple to Triarc for $300 million. They previously purchased Mistic from Joe Umbach for $95 million.  Triarc slowly began restoring Snapple’s popularity.

Arizona Iced Tea Tall Boy

Then Don Vultaggio and John Ferolito took the market by storm with Arizona Iced Tea by putting it in a 24-ounce tallboy can and charging 99 cents for it. Similarly to how Pepsi tried to outshine Coca-Cola by offering more of the product for the same price, Vultaggio thought that it would be the best way to take over Snapple, which was on the height of its popularity at the time.

Using beautifully decorated cans and incredibly uniquely labeled custom glass bottles, Arizona Iced Tea sped to the top of the Iced Tea category outselling all other competitors.

Today, Arizona is behind only Lipton in sales when it comes to canned and bottled teas, but still going strong.

What about Soho Soda?

A can of soda

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Soho Soda was started by Sophia Collier and Connie Best in 1977 and built it to a $20 million + brand before selling it to the Seagrams Beverage Company in 1989 for $14 million. Seagrams destroyed the brand in record time trying to save money by decreasing the 12 ounce bottle to a 10 ounce bottle and increasing the cost to distributors and retailers while changing the ingredients to save money. What followed was a much different beverage. And with brands like Clearly Canadian, Original New York Seltzer, and Zeltzer Seltzer nipping at their heals, Seagrams quietly sold the brand for a huge loss.  They were fond

Soho Soda and Snapple were some of the first pioneers of the better for you beverage industry.

Key Takeaways

The beverage industry has come a long way since its inception in the late 1700s. From the hands of pharmacists, it slowly transferred into the hands of businessmen and advertisers, who are largely responsible for the breakneck speed of its growth. It developed at the same pace new technologies did, allowing the manufacturers and distributors to break old boundaries with each passing year. This process eventually resulted in the massive industry we know today.

However, with consumers beginning to turn more to healthier and more environmentally-friendly options, the industry as we know it today is certainly going to keep changing. For every aspiring beverage entrepreneur, it’s important to follow industry insights and draw conclusions about the potential direction of the development of the industry itself. Opportunities for innovation might be just around the corner.

The History of the Beverage Industry (Part 1): Which Brands Carried Its Evolution?

A few months ago I wrote a blog called The Evolution of the Beverage Industry. My pal, Jim Tonkin, approached me at a recent industry event and told me he had higher expectations for that article. I took it to heart and decided to take his advice. This post is the first in a series of posts detailing the history of the beverage industry and the history of the various categories that have developed. I hope you, and Jim of course, enjoy these posts.

The History of the Beverage Industry: Which Brands Carried Its Evolution?

L0000728 Joseph Priestley’s Chemical apparatus. 18th C Credit: Wellcome Library, London. Wellcome Images images@wellcome.ac.uk http://wellcomeimages.org Chemical apparatus used by Joseph Priestley for his experiments on fixed air (carbon dioxide), which he absorbed in water to make soda water 18th Century Experiments and observations on different kinds of air Joseph Priestley Published: 1790 Copyrighted work available under Creative Commons Attribution only licence CC BY 4.0 http://creativecommons.org/licenses/by/4.0/

The beverage industry has a fascinating history, and not simply owing to the fact that drinks have been an integral part of the human experience since the dawn of civilization. The story of the industry begins much later, although still centuries ago.

With such a long development, it’s not surprising that there have been so many changes along the way in every aspect of the industry. Whether that’s the production of beverages, packaging, marketing, or the distribution of drinks, the industry has continually improved its processes, leading to the major commercial success and profitability of today.

To understand where the industry might be going in the future, as well as to evaluate its success and economic importance, we need to ask ourselves some questions that lead us into the past.

Where and how did the beverage industry make its first steps, and which brands carried its evolution?

Overview of the Beverage Industry

The beverage industry has two main sectors — the non-alcoholic beverage industry and the alcoholic beverage industry. Alcoholic beverage is a category that includes wine, distilled spirits, and brewing. However, the non-alcoholic category has a few sub-groups, some of which are the main facilitators of the growth of the entire industry. These sub-groups include:

  • Soft drink and water bottling and canning;
  • Soft drink syrup manufacture;
  • Fruit juices bottling, canning, and boxing;
  • Tea and coffee industry.

When we look at the beverage industry as a whole, its fragmentation is noticeable. There are many manufacturers, all with different production processes, packaging methods, and products. The one exception to this overall fragmentation is the soft drinks industry, and it is the first that began to transform from regional and local firms to global corporate giants. This process started in the early 1900s and is still going on today.

Economic Impact of Beverage Industry

Global sales of just one part of the beverage industry, carbonated soft drinks, are projected to reach $605 billion by 2025, according to Grand View Research reports. Every beverage type that is considered to be thriving is grossing billions in revenue annually. This doesn’t only include soft drinks, but alcoholic beverages as well. For some countries, the production of coffee is what keeps their entire economy going.

Additionally, the beverage industry has grown enough to employ millions of people around the world. What started as small pharmaceutical enterprises has turned into a sprawling global industry that is showing no signs of slowing down despite health and environmental controversies.

The Invention of Carbonated Beverages

In 17th century Europe, naturally carbonated water from springs was widely sought after due to its therapeutic qualities. The scientists of the time were fascinated by its carbon dioxide properties, which were first described as “gas” by Jan Baptista van Helmont, a Flemish scientist.

In 1685, Robert Boyle published Short Memoirs for the Natural Experimental History of Mineral Waters, where mineral water springs were explored in greater detail, along with ways of making artificial mineral water. Finally, in 1772, Joseph Priestley debuted his carbonating apparatus that eventually set him on the path to becoming the father of the soft drinks industry.

However, he wasn’t the first to produce carbonated water. This accomplishment is credited to Thomas Henry, an English apothecary who used a similarly designed apparatus. Following in their footsteps, Jacob Schweppe made his own carbonating device and began selling carbonated water in Geneva and London.

Therapeutic Intentions

Scientists and apothecaries were the first to start producing soft drinks because they intended to use them for therapeutic purposes. These early seltzers were used medicinally. By 1798, they were known as “soda water,” and in the early 1800s, the production of imitation mineral water was first patented and started on a large scale. The first soda water was bottled in the U.S. in 1835.

There was another interesting development during these years: soda fountains. Samuel Fahnestock patented the first one in 1819, and a hundred years later, virtually every apothecary had a soda fountain. In the 1840s, soda counters found their way into pharmacies. With time, soda fountains grew in popularity as meeting places where one could enjoy carbonated water and its healthful effects. However, that was just the beginning of the beverage industry’s journey.

New Flavors

The development didn’t stop at creating seltzer. Soon enough, drink makers began looking for ways to make their products more attractive by adding new flavors. They started mixing carbonated water with wine and flavored syrups, which is a practice that took off in the 1830s and became standard by the 1860s. You were able to buy seltzer with different flavors, including orange, lemon, pineapple, pear, peach, plum, apricot, grapes, different types of berries, melon, and apple.

Of course, suppliers and manufacturers were constantly on the lookout for new flavors and new ways to incorporate carbonated water into drinks. In 1874, ice-cream soda was invented and sold. Other drinks reached the peak of their popularity decades later during the prohibition era. Those drinks were ginger ale and root beer. Both of which were made with carbonated water.

Ginger Ale and Root Beer

In 1851, ginger ale was created in Ireland. It was part of the effort to flavor artificial mineral water, or rather carbonate other previously non-carbonated drinks. The man who popularized ginger ale and made a trademark drink out of it was a pharmacist from Canada, John McLaughlin, in 1890. In 1907, he invented what is known today as the Canada Dry version of Ginger Ale. This drink became especially popular during the Prohibition, as a perfect mixer to make spirits last longer and cover up their taste.

Root beer has had a similar history, but it was one of the more complex carbonated drinks. It contained more than 25 herbs and other ingredients when it was first introduced to the public in 1876. By 1839, Hires’ Root Beer was first bottled, distributed, and sold, becoming a popular variant of flavored carbonated water.

More Flavors

Cotton Club. The Cotton Club Bottling Company of Cleveland, Ohio was founded in 1902 as Miller-Becker Bottlers, named after Isaac Miller and Eli Becker. In 1954, a new bottling plant was built on E. 49th street when, that same year, soft drinks were sold in cans as well as bottles. The company name was changed to Cotton Club in 1963. During the 1960s and 1970s, the company bottled a variety of soft drinks with the Cotton Club name; grape, orange, ginger ale (and a ginger ale called Big Ginger 50/50, cola, root beer, cherry-strawberry, a fruit punch-soda called Tropical Delight and a red pop called Cherikee Red. SomeCotton Club products are still available in Ohio.

The Birth of Major Beverage Brands

The industry would forever be changed with the invention of the first sodas: Dr. Pepper, Coca-Cola, and Pepsi-Cola. All three entered the scene in the late 1800s.

The first was Dr. Pepper, invented by pharmacist Charles Anderton in Waco, Texas. The drink was born from Anderton’s experimentation with soft drinks and sold at his soda fountain. It quickly became so popular that Anderton had trouble keeping up with the demand. The Dr. Pepper formula was and is a secret, but back in the day, it was advertised as an energizing brain tonic. There are speculations that the drink was named after Dr. Charles Pepper, whom Anderton had worked for before starting to experiment with making his own drinks.

Just a year later, in 1886, Dr. John Pemberton created Coca-Cola through a unique combination of coca leaves from South America and kola nut from Africa. Pemberton was another pharmacist, working in Atlanta. He created the formula on his own and started selling it from a soda fountain at Jacob’s Pharmacy in Atlanta. However, it wasn’t until businessman Asa Candler bought the formula from Pemberton and began manufacturing it on his own that the drink really became popular.

And in 1898, Caleb Bradham invented Pepsi-Cola. Initially called Brad’s Drink, it contained the now-famous kola nut, along with sugar, caramel, lemon oil, nutmeg, and, of course, carbonated water. When it started becoming more popular at his soda fountain, Bradham named it Pepsi-Cola, trademarked the drink, and began selling it as a digestive aid.

Expansion of the Industry

As these drinks gained popularity, the industry was growing more focused on bottled products, which led to the eventual downfall of soda fountains. To put the rate of this growth into context, there were 123 plants in the United States bottling soft drinks in 1860. Ten years later, that number grew to 387. In 1900, 2,673 plants were bottling soft drinks in the U.S.

One of the reasons for this speedy expansion was the impeccable public image of soft drinks. Seen as a tame alternative to alcoholic beverages, they were the respectable option that one could buy at a pharmacy. Of course, many industrial developments allowed for more efficient manufacturing and distribution process, such as replacing horse-drawn carriages with gas-motored trucks.

Finally, there is the appeal of advertising as well. While Coca-Cola had its aggressive advertising campaigns led by Candler, Pepsi wasn’t too far behind. In fact, they were the first brand to use the appeal of celebrities, hiring a famous race car driver, Barney Oldfield, in 1913 to be their brand spokesman.

Mass Production

The industry grew so fast, and technology advanced quickly enough to allow the start of mass production as early as the first decade of the 1900s. In 1904, there were one million gallons of Coca-Cola sold annually. Still, there were obstacles that the industry had to face, especially during World War I and World War II.

Pepsi Cola went bankrupt in 1923, after Bradham’s unsuccessful gamble with trying to profit off the prices of sugar. In the 1930s, Pepsi was reformulated and put in packages almost double the size of Coca-Cola, scoring them an effective advertising campaign with “twice as much for a nickel.” They survived World War II by becoming a popular drink for U.S. soldiers.

After the tumultuous war years, the industry continued to develop and advance its bottling and packaging processes. In 1957 we saw the invention of aluminum cans for soft drinks. In 1965, we got our first canned soft drinks in vending machines. And in the 1970s, the industry introduced plastic packaging for soft drinks, specifically the Polyethylene Terephthalate bottle. Out of all the beverage industry inventions, this one was by far the worst when it comes to environmental impact.

However, there are other concerns about the impact of soda, not only on our planet but on our health as well.

Health Impact of Soda

Even though soda drinks started as pharmaceutical products, the industry and mass production changed their purpose over time. During the soda fountain days, sodas were made with mostly natural and healthy ingredients, with syrups that weren’t overly sweet. But by the 1990s, soda drinks have transformed so much that there were barely any healthy ingredients left in them.

Even in 1942, there were some controversies connecting sugar-sweetened beverages or soda drinks to certain health issues. The first studies confirming these doubts appeared in 1994. Health issues like obesity, diabetes, and tooth decay contributed to consumers rallying against giants like Coca-Cola and Pepsi.

In 2009, 33 states implemented taxes on soft drinks, and this was the start of a legislative struggle to limit the harmful health effects of sugar-sweetened beverages. However, many of these proposals failed — most notably, the 2013 New York City attempt to ban the sale of soft drinks larger than 16 ounces.

Despite their initially positive public image, soft drinks are now being viewed as harmful, and many manufacturers are required to put health warning labels on their drinks. Much like alcohol and tobacco, sodas have fallen out of public favor, and they have almost nothing in common with the drinks that gave birth to the industry.

Key Takeaways

The beverage industry has come a long way since its inception in the late 1700s. From the hands of pharmacists, it slowly transferred into the hands of businessmen and advertisers, who are largely responsible for the breakneck speed of its growth. It developed at the same pace new technologies did, allowing the manufacturers and distributors to break old boundaries with each passing year. This process eventually resulted in the massive industry we know today.

However, with consumers beginning to turn more to healthier and more environmentally-friendly options, the industry as we know it today is certainly going to keep changing. For every aspiring beverage entrepreneur, it’s important to follow industry insights and draw conclusions about the potential direction of the development of the industry itself. Opportunities for innovation might be just around the corner.  

It’s Time for Glass Again — Can We End Beverage Industry’s Use of Plastic?

When was the last time you were able to purchase a soft drink in a reusable glass bottle?

When was the last time you even saw a soft drink in a glass packaging?

Today, single-use plastic packaging is still omnipresent, despite our increasing environmental awareness. According to a World Wide Fund for Nature study, an average person consumes 1,769 tiny plastic particles and fibers every week just from drinking water. That accumulates to around a half-pound of plastic every year!

And we aren’t the only ones feeling the impact of plastic. We might be the last link experiencing the results in the huge chain that makes up our environment. Unfortunately, the beverage industry plays a significant role in plastic pollution of the Earth. Let’s have a closer look at how plastic impacts our environment and whether we could turn the bleak trend around by going back to glass bottles.

Environmental Impact of Plastic

In the ‘60s, plastic waste was observed in the oceans for the first time, which ended the reputation of plastic materials as entirely positive and great to use. Even though plastic helped our industrial advancement, especially in the years after World War II, we did not have enough foresight to predict its environmental impact.

And it is dire, mostly because that plastic, made from synthetic materials not found in nature, can take forever to decompose on its own. Most plastic bottles take at least 450 years to biodegrade, and only if they weren’t made with Polyethylene Terephthalate (PET).

Today, plastic pollution is a huge problem — it has contaminated our oceans most of all. Toxins from plastic find their way into plankton, which is the base food of most marine ocean species. It travels through the entire food chain, ending up on our own tables.

But our air and land are also polluted. When plastic is burned to dispose of it, toxins are released into the air. While it waits for its turn to be disposed of in landfills, we end up needing more and more space for storing garbage.

According to Science (website), about 8 million metric tons are thrown into the ocean each and every year. This is the equivalent weight of approximately 25,000 Empire State buildings (website). Even with current recycling and conservation efforts, the amount of plastic in the oceans will increase 10 times by 2020 (website) and by 2050 there will be more plastic in the oceans by weight than fish (website). Recently, a dead whale in the Philippines contained more than 88 pounds of plastic in its stomach (website). Has anyone asked what happens to that plastic when we eat the fish that live in our oceans?

The global annual production of plastic exceeded 350 million tons in 2013. By 2015, the world had produced 7.8 billion tons of plastic. Back in the day, single-use plastic seemed like a great idea — but we are overproducing it, drowning in it, and making the entire planet sick in the process. And it is time to re-think single use plastic beverages.  Recycling has failed to fix the ultimate problem.

According to Greenpeace (website) and the Breakfree from Plastics Movement (website) the top four plastic polluters in the WORLD are, from highest to lowest, Coca Cola, PepsiCo, Nestle and Dannone.

This conversation is not simply about the birds and the bees or “fishees” in the ocean.  This conversation is about the world in which human beings live and the net effect plastic has on human beings, current and future generations. It is impossible to argue that plastic is good for mankind.  It is convenient and it is less expensive, but that does not make it acceptable. Food and Beverage companies need to take responsibility for the damage they are doing to promote their bottom line.

Use of Plastic in the Beverage Industry

The beverage industry is one of the major players in the plastic packaging market — especially the companies that produce soft drinks, like Coca-Cola and PepsiCo. According to Greenpeace, Coca-Cola Company alone produced more than 100 billion plastic bottles in 2016. And if we compare this statistic to the data stating that over 90% of plastic isn’t recycled, it becomes easier to put the beverage industry plastic pollution into context.

In the earlier years, these big names in the industry committed to plastic, believing (or simply stating) that they would increase their efforts to reclaim and recycling it. However, with a lack of deposit systems and financial incentives to recycle, the system ended up being wasteful. Around 70% of bottles are never reclaimed, which leads to a low recycling rate. According to Euromonitor data, less than 7% of recycled bottles were turned into new bottles.

Beverage giants like Pepsi are aiming to start using biodegradable plastic. However, according to some experts, this will take a long time to accomplish, because the packaging must still be able to preserve the contents. What’s more, even biodegradable plastic can release damaging gases into the air, such as methane.

Initiatives against the Use of Plastic

https://time.com/4186250/ocean-plastic-fish/

Slowly but surely, the public opinion grows harsher towards plastic, especially single-use plastic that is most responsible for pollution. More and more initiatives against it are cropping up, and we might soon ensure that the industry as a whole takes a turn to a different direction.

One of the most notable ones is the New Plastics Economy Global Commitment, which was launched in 2018 by Ellen MacArthur Foundation (EMF) and UN Environment. It has 250 corporate signatories, including Danone, PepsiCo, and Coca-Cola Co.

All of the signatories committed to a few decisive actions to complete by 2025:

  • to take action to eliminate unnecessary or problematic plastic packaging;
  • to move away from single-use models towards reuse models where that’s possible;
  • to use recyclable content in all their plastic packaging;
  • to make 100% of their plastic packaging reusable, compostable or recyclable.

While these efforts to make plastic packaging recyclable and to improve our recycling systems are a step in the right direction, perhaps we need to look away from synthetic substitutes and slightly different alternatives. There are much more sustainable packaging solutions, one of which the beverage industry has used in the past. Of course, that would be glass packaging.

Use of Returnable or Recyclable Glass Bottles

In 2012, we saw the last ever returnable glass Coca-Cola bottle pass away into beverage history. Soft drinks and glass bottles used to be great friends in the early days of the industry, as the glass bottles were able to endure the pressure of carbonation.

However, the practice of returning glass bottles had nothing to do with sustainability or environment preservation back in the day. The reasons why consumers were incentivized to return glass bottles to the manufacturer with a bottle refund fee were the price and difficulty of the manufacturing process. The bottles were therefore considered company property, and consumers would return them to be refilled and reused.

Eventually, the glass bottle was overshadowed by the plastic model, as it was much easier and less expensive to transport plastic safely. Plastic bottles were considered to be more lightweight, resistant to breakage, and therefore superior in every way when compared to glass bottles. The environmental impact wasn’t considered or analyzed.

Benefits of Reusing Glass Bottles

http://www.fashionrepublik.com/virgil-abloh-designs-evians-first-reusable-glass-bottle/

What beverage companies were unaware of was that the practice of reusable glass bottles helped keep excessive amounts of waste from the landfills. But as it turns out, plastic isn’t the superior packaging material in any aspect other than weight and resistance to breakage. Glass bottles are more hygienic, and more capable of preserving the contents without a change in flavor, strength, and aroma — not to mention their aesthetic appeal.

Overall, there are multiple benefits to returning to the practice of using glass bottles for the packaging of soft drinks. Perhaps the biggest obstacle to returning reusable glass bottles as the industry standard is the way things are done nowadays.

Since there is no standard glass packaging, every bottle looks different. That makes reusing more difficult, as we have to sort our glass bottles meticulously to determine which ones we can recycle, and which ones we can return and where. The process for the consumer isn’t straightforward — but could it become more so?

Could Beverage Industry Start Using Glass Bottles Again?

If we take a look back, we could find the time where most liquids were packaged into glass bottles to be refilled and reused, and learn from it. Before World War II, that used to be the industry standard. However, all glass bottles were identical and therefore, easily reusable.

That would make the process easier to re-implement today. Beverage companies tend to avoid reusable glass bottles because the difference in design requires extra efforts in sorting. What’s more, collecting and transporting reusable glass bottles requires more storage facilities and labor. For most beverage companies, that would mean involving the retailers into the collection and shipment, which overly complicates the process, especially when compared to single-use plastic.

However, it would still be possible to reintroduce reusable glass bottles as the industry standard. It might take some time, but the results are worth it: 93% less energy consumed by a refillable bottle that can be reused 25 times, as opposed to one-way glass bottles. Of course, when compared to plastic it becomes even more evident how much better reusable glass bottles are: the use of energy in MJ and the CO2 equivalent of its Global Warming Potential is the lowest of all container materials.

Reusable Glass Bottles and the Glass Bottle Market

Reusable glass bottles will be the clear favorite if we wish to implement more sustainable practices. However, it would require preparation, as we would have to standardize our glass containers to make the process easier.

Today, companies that make refillable glass containers have packages of different sizes and shapes, even colors. This might be a contributing factor in the low return rates of refillable glass bottles (that also contributed to the eventual decrease in their use).

But what if bottles were standardized, and returned locally for sanitization and refilling? Then we could implement the reuse of glass bottles on a bigger scale, and ensure that one bottle does get returned 25 to 30 times to maximize sustainability.

The glass bottles and containers market is also growing, and showing potential for more progress thanks to European consumers. It’s predicted to reach $76 million in value by 2024. Most of it was glass for recycling and not refilling — European average recycling rate is an estimated 54%, as opposed to the reuse rate of 7%.

Aluminum Cans are Another Possible Solution   

https://visual.ly/community/infographic/environment/interesting-facts-about-aluminum

According to Chasinggreen.com, aluminum is 100% recyclable and can be recycled almost indefinitely without loss of quality or durability. They can be recycled, repurposed, and back in the store in as little as two months and the average recycling rate of aluminum cans 68%, the highest rate of recycling of any resource. The use of recycled aluminum in manufacturing utilizes 95% less energy than creating aluminum from raw materials.

However, there is also a negative side of aluminum cans. The aluminum industry was responsible for 140 million tons of CO2 production in 2005 alone and it is a non-renewable resource. It also takes 2-4 tons of bauxite to produce just one ton of aluminum through smelting and refining. Aluminum production spends over $2.3 billion annually for energy. Most of that energy is used to create aluminum: over 1 quadrillion Btu of electricity a year and some research suggests that BPA, a chemical lining found in some aluminum cans, may pose health risks.

What Consumers Think

One of the most critical pieces of the puzzle will be the consumer, requiring a change in behavior to move from pollution to sustainability. The good news is that consumers are becoming more environmentally aware and putting more stock into sustainable products and solutions.

According to a report by Pro Carton, 75% of European consumers have stated that the environmental impact of the packaging of a product affects their purchasing decisions. What’s more, they are also influenced by the media coverage of pollution, especially when it comes to marine pollution.

The majority of consumers tend to prefer more environmentally-friendly options while shopping, especially if it doesn’t cost them much extra to help preserve the planet. However, that doesn’t mean they aren’t prepared to pay more: 77% of Pro Carton survey responders said they were prepared to do so. In addition to that, 58% of them would support increased taxes on non-sustainable packaging in order to incentivize brands to think harder about their environmental impact.

All of these statistics are very encouraging and clearly show that we’re ready to start making crucial changes. Even the major players thinking only about profit can benefit from meeting consumer demand for sustainability.

It’s Time for Glass Again

Can the beverage industry’s use of pollution-inducing plastic packaging end? It certainly can. While there are some disagreements on which materials should replace plastic, the message is still loud and clear — beverage companies and entrepreneurs have to change their ways.

Glass packaging, especially reusable glass bottles, could be the answer to the environmental crisis we now face. With a low carbon footprint and multiple other benefits regarding the quality of packaging, glass would be a great choice. And if we made an effort to make reusing glass bottles more accessible and more standardized, market research shows that consumers would rise to the occasion and help make it the new industry standard.

Reducing plastic pollution should be one of the main priorities of the beverage industry. To accomplish this task, now might be the time to start using glass again.

Key Takeaways

It’s our responsibility as beverage industry leaders, entrepreneurs, and consumers to demand and facilitate change. Today, every link of the beverage industry chain might be ready to commit to making this change a reality.

Getting rid of the beverage industry’s share of plastic pollution by implementing more sustainable options, glass bottles or even re-usable glass bottles, might be of utmost importance for the future of this blue planet. If we don’t turn away from plastic now and start repairing the damage we’ve made, it might be too late in a few decades or even a few years.

It is time to admit the conversion to plastic from glass has failed and these companies continue to fail mankind in favor of profits. Human beings are almost equally complicity by purchasing these products. It is time for the Big Four to eliminate plastic products and force competitors to convert as well.  It is time to end plastic for profit over convenience.

Why Large Food and Beverage Companies Fail at New Product Development

Example of New Product Failure: Colgate Lasagna
Example of New Product Failure: Colgate Lasagna

In the food and beverage industry, even the giants can have a hard time developing and launching new products. However, their troubles are usually entirely different from that of a food and beverage entrepreneur. These huge companies have all the advantages of troves of data, experienced marketing departments, and plenty of resources to make the new product succeed. But they still fail.

In fact, according to multiple sources, approximately 80% of new products developed by large food and beverage companies end up failing. This is a staggering statistic that perfectly showcases the scope of the problem. But why does this happen so often, and is there a solution that can turn this trend around? Let’s have a closer look at why large food and beverage companies fail at product development:

Big Companies and Innovation Struggles

As technology began to advance, most innovation in the food and beverage sector was tied to finding ways to prolong a product’s shelf life or get it to consumers faster. But today the market’s needs and appetites have grown way beyond this, especially as the consumers’ attitude towards food and nutrients changes. 

Consumers are becoming more aware that what they eat and drink has a significant impact on their health, so they are seeking out the best possible options. That’s why large companies that don’t have a lineup of healthy, good-for-you products are finding themselves in a problem when developing new products. And unfortunately, the vast majority of big food and beverage companies falls into this group, as the trailblazers of new healthier trends are usually smaller businesses and food entrepreneurs.

To Reformulate or to Relaunch?

According to IRI, of 10,000 new products that are launched every year, as much as 90% fails to achieve sales goals. In fact, many of them aren’t even around two or three years down the road, which makes launching entirely new products a risky undertaking for most companies. In most cases, they decide to reformulate or relaunch their existing products to make them more appealing to the changing public opinion on how our food and beverages should be.

If we take a look at Consumer Good Forum statistics, we can see that 66% of their members have reported having reformulated some of their products in 2016. Some of the most common changes implemented in product reformulation are reducing the amount of sugar and sodium, adding vitamins, or using healthier alternatives to certain staples (such as switching to whole grains).

Declining Sales and New Product Launch Fails

The main reason for relaunching existing products is declining sales. Between 2012 and 2015, the U.S. retail sales of the top 25 food and beverage giants have gone down from 66% to 63%, according to the study Is Big Food In Trouble by The Hartman Group and A.T. Kearney.

However, the need for change hasn’t prevented new product development and launch fails. A few reasons stand out. There were cases of companies making the wrong conclusions on what the market needed, developing products that didn’t fit with their brand image, and choosing the wrong trends to chase.

Wrong Conclusions on Market Wants and Needs

Despite having a wealth of data at their disposal regarding products, taste tests, and market research, sometimes companies just fail to ask themselves whether someone will be willing to buy the product and at what price.

For example, let’s have a look at Coca-Cola’s C2, their attempt from 2004 to gain the favor of a target market that’s been avoiding their products. C2 was meant to be a middle ground between classic Coke and Diet Coke. The idea was to capture the interest of 20- to 40-year-old men, who were mindful of their calorie intake while avoiding Diet Coke because of its general appeal to women.

However, C2 only had half the calories and carbs of a classic Coke — it wasn’t a complete no-calorie version like Diet Coke. As such, its qualities weren’t distinctive enough to allow it to stand out in the market, even if it did (in theory) need a similar option. The target consumers simply didn’t find it appealing enough.

Just because a Company spends a lot of money on or does a lot of consumer research doesn’t mean they are correct. If that were true, Coke and Pepsi, and other conglomerates like them, would never fail. But that is not the case.

Research needs to be combined with gut instinct to be successful. If you look at the most successful, “new”, innovative and disruptive brands, none of them used expensive and extensive consumer research in the beginning:

Amazon
Bai
Boom Chicka Pop
Deep River Snacks
Dirty Lemon
Dirty Potato Chips
Fiji
GT Kombucha
Kettle Chips
Keurig
Liquid Death
Mama Chia
Monster
Naked Juice
Netflix
Perky Jerky
Pirate’s Booty
Red Bull
Smart Water
Sophie’s Kitchen
Starbucks
Vita Coco
Vitamin Water
Voss
Whole Foods
Zico

The Product Doesn’t Fit with the Brand

Big companies also face difficulties trying to expand their lines or launch new ones with products that stand out from what they were known to do. When many companies first reformulate their existing lines and launch new products that are more in line with the new brand image, there are sometimes cases where the consumers aren’t prepared for the change.

More often than not, these fails come from a brand branching out into the food and beverage industry — such as Colgate’s frozen lasagna or Cosmopolitan’s yogurt. However, that isn’t to say that food and beverage giants are immune to developing products that just don’t fit with the brand image, whether that’s in a big or a small way.

Trying to Capitalize on a Trend

Finally, one of the biggest and most frequent causes of new product development fails is chasing the wrong trends or fads. When a company is too early or too late to the current consumer preferences party, it inevitably brings low interest and even lower sales. Trends like low-carb diets have proven fleeting, which is something Coca-Cola has felt with their C2 release as well. 

However, some notable innovations are still prevalent in the food and beverage industry. Alternatives to dairy, Greek yogurt, free-from foods, plant-based protein suitable for a vegan diet, etc. have mostly been brought on by smaller companies or entrepreneurs. It’s therefore essential for food and beverage giants to correctly interpret their market data, and accurately predict the coming market trends that are here to stay.

Key TakeawaysBig food and beverage companies and smaller businesses alike need to watch for industry insights and anticipate market trends. Staying true to your brand is more important than ever, as that prevents consumer confusion or disappointment. However, it’s even more crucial to adapt to the changes in the industry and the growing market demand for healthier food and drink options.

Dealing with a Board of Directors and Still Running a Good Business

Board of Directors

Becoming a CEO of your own company is a significant milestone — one that many business owners are unprepared for, despite their efforts to get there. In the food and beverage industry, the business aspect of running your own company can be challenging to deal with at first. Most entrepreneurs get into the industry because of their passion for food, not necessarily board meetings and crunching numbers.

But after you get funding, working with a board of directors will become one of your new tasks as the CEO. Knowing when to accept their input and when to push back comes with time and experience. However, if you’re having trouble now, or you are wondering how best to manage a board of directors, take a look at these tips:

Set Expectations and Define Roles

It will be up to you to set expectations, both for yourself and the board members. You should make it clear that the board of directors does not run an organization, even though their input will certainly be valued. It’s also something you should know as well — board members aren’t going to be involved in any operational or administrative issues. Their primary role is helping with the mission and strategy of the company.

Every CEO should work with their board, not against it, but that can sometimes happen if expectations aren’t set and the board members become overbearing. As the CEO, the final word is yours. While their different perspectives on the same issue should be carefully examined and assessed, all parties involved should be aware that the CEO makes the decisions.

Have a Good Strategy

Strategies will often reveal their flaws too late in the process of implementation unless they’ve been properly evaluated. No matter whether your board of directors is difficult or easy to work with, they will want to know your strategy, and it better be a good one. 

What that means is that you should make it cohesive and truly commit to a single way of doing things, rather than trying to balance between two or more. When developing a strategy to present to the board, assess your company’s strengths, weaknesses, opportunities and threats, and start building from there.

Communicate

To nip communication problems in the bud when dealing with the board of directors, you need to be proactive. Effective communication is one of the foundations of a good working relationship with the board, so keep them informed about the things they need to know.

Those include both minuscule and significant strategy changes that influence the execution of your overall plan, product launches, and other initiatives. The board is usually aware of the fact that plans are prone to changes, but they need to know why they’re changing before you commit to it. Agree with them about your plans and back-up options ahead of time, so that it’s easier to keep their involvement optimal.

Learn when to Email and when to Set a Meeting

Generally speaking, there is no need for a board meeting unless there is a complicated issue that you wish to discuss with the board. It’s perfectly acceptable to update the board via email if things are running smoothly and there is no bad news to report. 

The frequency of the emails will depend on your preferences as those of the board. A short email once a week should be more than enough — or it can be bi-weekly or monthly. When presenting problems or opportunities to the board, make sure you’re also exploring the possible options of dealing with the issues or making the best possible use of the possibilities.

Schedule Meetings Well in Advance

CEOs lead busy lives, but so do board members. It’s a good practice for companies that are still in the early stages to have regular board meetings every few months. That way, both you and the board can prepare well in advance. Send them all materials well before the meeting, so they can have time to go through the decks and prepare their input. 

Send this material a week before the meeting is optimal. This way, the metrics you’ll be discussing won’t be outdated, and the board will have enough time to evaluate them. A couple of weeks beforehand is the right time to notify the board of the agenda, usually consisting of less than six key topics. 

Open Feedback Channels

It’s essential to open feedback channels to the board, but you should do so in a sensible way that won’t have you overwhelmed. Before or after board meetings is a good time to invite feedback from the board regarding the topics you’re discussing during the meeting. Make sure to set a time for open discussion and questions after the main agenda of the board meeting has been covered. 

You can invite them to ask you questions, or ask them whether the topics you discussed fulfilled their expectations. Make sure also to give them time to discuss things in private – board members only. They can talk about the meeting amongst themselves and appoint one person to relay their feedback.

Be Transparent

Being transparent and open with the board will go a long way in ensuring smooth sailing when it comes to your relationship with them. By sending them notices about important news and events, whether they’re positive or negative, you get them used to open discussion of all issues and enhance trust. 

That way, they’ll start letting you decide when there is a need to exchange information and opinions and trust that you’re handling yourself well. When the CEO is transparent, there’s no room for the board to become intrusive or burdensome.

Key Takeaways Managing your own company is a challenge, and adjusting to the role of the CEO takes time. When it comes to dealing with the board of directors, you need to learn quickly, set expectations, and set the tone of your cooperation as early as possible. As a food entrepreneur turned CEO, you must decide how well you’re going to follow industry insights and adjust to your new role, including working with the board of directors.

The Evolution of the Beverage Industry

The food and beverage business isn’t only about anticipating market trends or creating great social media campaigns. These are important, but love for food and drinks is the core of the business. It has been present as the driving force of the industry since its beginning.

It’s essential for every food and beverage brand to keep this in mind and remember the long and fascinating history of the food and beverage industry. For entrepreneurs who wish to make their mark on it, understanding how it might evolve is critical. We can learn from how the industry has developed so far, and conclude how it’s going to change in the future. Let’s have a closer look at the evolution of the food and beverage industry:

Origins of the Food and Drinks Business

Even though the human race has prepared food since the earliest days, the practice didn’t take on the characteristics of business until medieval times. In the 11th century, some guilds provided goods and services, and food vendors were among them. The guilds also showed the first signs of specializations that would later become so crucial for the entire industry. As highly specialized vendors became more and more sought after in the medieval society, more distinctions started developing. For example, there were master butchers and bakers, who took on apprentices and trained them in the skills that they would need to continue the profession. We sorely lack expertise at these levels today.  Everyone wants to have a Master’s Degree, but those that work hard, like butchers and bakers, can make a nice living and live a nice life.

It is a form of learning that is still present in the culinary world, even though the system of guilds has long since been abandoned. However, the concept of apprenticeship endured and has become essential to the food and drinks businesses of a later time. Despite losing the economic battle, the old guild systems did establish a practice that is still highly relevant today.

Culinary Skills as Front and Center of Development

The culinary arts and skills were a major part of the development of the food business. However, that only happened once the profession was organized and standardized. And despite the long tradition of the practice, that didn’t happen until the early 19th century. It was then that the Frenchman Marie-Antoine Carême took the first steps towards shaping the future of the standardization of culinary art.

He was a developer of original recipes, but he was also entirely dedicated to the presentation of his food, creating fascinating centerpieces out of it. However, his most significant contribution to shaping the future food business came from his culinary texts, which contained vocabulary other cooks began to use. It formed the backbone of establishing cooking terms and providing a common language to the professionals in the same industry. From these developments, the culinary arts advanced to what we’ve come to know today — a food service industry that makes up 10% of the total U.S. workforce.

Major Turning Points for the Industry

Still, the major turning points for the industry on a large scale happened with a few breakthroughs that have changed everything. The significant years were 1810 when Nicolas Appert invented canning, and 1863, the year when Louis Pasteur developed the process of pasteurization.

It took Nicolas Appert 14 years to develop his canning process, and that despite knowing it worked, he wasn’t sure why it worked. His motivation was the prize offered by the French army during the French Revolutionary Wars to invent a way to store food safely. Appert did it, by canning food, heating it and letting it cool — but he did not know that doing so would keep out the bacteria and microorganisms that caused the food to spoil.

It was Louis Pasteur’s research that found this connection years later, and it allowed him to develop the process of pasteurization. The origins of his discovery came from a commission of an alcohol manufacturer who wanted Pasteur to discover why beet alcohol goes sour. Eventually, the discovery led to pasteurization saving France’s wine industry.

Both discoveries changed the industry forever, allowing the food to be packaged and safe to be used and sold for a prolonged time. However, developing the retail practices of today took many distribution and storage improvements. What once was a positive, may be seen today as somewhat negative and food and beverage companies work tirelessly to extend shelf life, sometimes seemingly at any cost, including health.

A new Focus on Health and Future Evolution

Today, food and beverage industry have branched into numerous segments. We have functional foods and drinks, packaged foods, baked food, baby food, animal food, groceries, alcoholic beverages, soft drinks, energy drinks, and many other categories. The competition is fierce in every single one of them. Plunkett Research estimated the worth of the global food and beverage industry in 2015 to be around $7.8 trillion. It makes it a priority for industry professionals to cater to consumer demand — and the preferences of the market are slowly changing.

Millennials make up a significant part of the entire consumer force in the economy, and catering to that market requires a shifting attitude towards healthier options. The market is asking for less sugar, fewer additives, and fewer ingredients that don’t look like real food on the ingredient lists. It might cause a slight shift towards local, more sustainable, and ethical food and drinks options in the future.

However, industry professionals also need to account for the advancement of technology in their plans for the future. Smart devices will also make the consumers’ shopping habits smarter, and it’s going to be critical to adjust to the new developments in tech. It’s still safe to say that the future of the food and drinks industry will be determined by what the consumers need most.

Key Takeaways In the fast-paced, quickly-changing business environment of today, it’s become more important than ever to stay current by following industry insights and trends. Alternatively, an aspiring food and beverage entrepreneur may attempt to set new trends by disrupting the industry. It can be done much the same way as Nicolas Appert, and Louis Pasteur once did — with a breakthrough invention or idea that has the power to make an outstanding change, even if the scale it starts at is small.

Beverage Business Success Stories that Will Inspire You

Boba Guys

We all need a little inspiration sometimes. That’s especially true for entrepreneurs, who have to walk long, winding, and steep roads before seeing success in their chosen industry. Beverage business is not an easy one to stay afloat in, so having a reminder that it’s possible can only help.

Of course, that isn’t to say that you can’t take your path to success. However, it might help to know how others did it before you, and why they managed to do it well. To help inspire you, here are some beverage business success stories that will leave you feeling ready to conquer the world:

Boba Guys

Boba Guys is a brand with a fascinating history. They started as a pop-up shop, eventually evolving into a milk tea bar with two locations in San Francisco. The founders of Boba Guys are Andrew Chau and Bin Chen — and they’re behind the main brand idea to redefine the boba and tea experience.

They built their brand around their community and used social media to grasp the interest of the locals. That allowed them to draw in more foot traffic and ensured that people knew about their business. When the time came to open new locations, they had a lot of interested people. The local awareness ads they did, only cost $1 per new customer acquisition, which marks a superb example of using ads to increase in-store sales and find new customers.

LaCroix

The story of LaCroix is one of the social media boosted growth, although sales have been sliding recently. The brand has cleverly tapped into the Millennial market, making use of mainstream pop culture and increasing the growth of their entire category. Sparkling water category had a 16.2% growth in 2016, while LaCroix grew by 72.7%.

The surprising fact is that the brand has been around since the 80s, so this might be considered late blooming. However, it’s certainly used social media to build a fun marketing campaign that was a hit with the Millennials. More importantly, the brand focused on their target audience’s health concerns and desire to consume more natural products. LaCroix took the sugar out of a sparkling drink, but still provided fun and refreshing bubbly flavors that resonated with younger consumers.

The main point of their branding and marketing strategy was using terms like “calorie-free,” “sugar-free,” and “naturally flavored carbonated water.” By doing so, they took up the position of a healthy option on the market. Coupled with a great social media strategy that brought them a massive Instagram following, the brand took off.

Dyla

Dyla is a company selling two successful beverage brands. A coffee drink and a fruit drink, FORTO, and Stur, are present in over 25,000 retail stores. Dyla founder and CEO Neel Premkumar have managed to double the size of the company every year. The company had the honor to win the NJ Future 50 Award that declared it one of the fastest-growing companies in New Jersey.

So what is the secret? According to Premkumar, having to work in every role in the company over the years has taught him about every job’s challenges and responsibilities. That helped him understand who he needed in each position as he grew the company and searched for new talent. The main challenge for Premkumar was financing the growth of the company, which he began from his savings.

Both Dyla brands, Stur and FORTO, are doing great in their respective categories. Interestingly, each has answered to at least one of the leading trends in the beverage industry. Stur is a drink mix that only contains natural and organic ingredients, while FORTO is a coffee energy shot that offers more caffeine to help those that live hectic lives to get more things done.

Innocent Drinks

This brand started with an exciting story that was in the heart of its success. The three founders of Innocent Drinks, Richard Reed, Adam Balon, and Jon Wright, took to a London festival in 1998 with £500 worth of fruit. They had a “yes” and “no” bin, and asked the people who bought smoothies from them to vote on whether they should quit their day jobs to make smoothies.

The answer they got was a resounding (well, overflowing) “yes,” so they ended up founding Innocent Drinks and securing an investment of £250,000 after 15 months of looking for investors. The company donated a lot of its profits to charity, and the founders set up their foundation to support farming NGOs in developing countries.

The 2008 recession shook the company after they’d already expanded further into Europe, but they ended up being purchased by Coca-Cola for a reported £320 million in 2013. At the time, they dominated the chilled drinks market in Austria, Germany, and Denmark.

The main appeal of the brand was in their dedication to their community and remembered where they started. Innocent even went on to organize their unplugged festival yearly, to tell the story of their brand and encourage people to reconnect with the people around them. Storytelling was a significant factor contributing to their success, as they managed to convey their brand values visually. They did it first through packaging, and later through videos and social media campaigns.

Another important focus was on nature and health, which is an essential topic for consumers nowadays. The brand also gave back through charity, donating close to €4 million, and organizing events such as The Big Knit, which let people trade in their knitted hats for Innocent smoothies. Innocent Drinks is truly a unique brand with a fascinating story that many up and coming beverage entrepreneurs could learn from.

Key Takeaways

Beverage businesses gain an edge by staying on top of industry insights and anticipating market trends. But it’s possible even for the small beverage entrepreneur to begin making their mark on the business.

What’s important is to commit to it, not lose hope and let yourself be inspired by those that are already successful. After all, every business has to start somewhere.

8 Tips for Breaking into the Beverage Industry

Breaking into any industry is no easy endeavor, no matter the budget or expertise you have behind you. It still takes an immense amount of work, research, and effort to be able to even break even as a beverage entrepreneur. However, with that in mind, it’s also important to mention that it is possible to break into the beverage industry.

Yes, it is a lot of work, but there are many resources and information to work with. With that wealth of knowledge, any aspiring entrepreneur can find their path to success. With enough determination and a generous helping of blood, sweat, and tears, anything is possible. To help you out, here are eight tips for breaking into the beverage industry:

  • Find What Problem You Can Solve

No successful business can begin without extensive market research. The reason for that is simple: the market itself is what you’re aiming to conquer. You might have an eccentric beverage idea that’s cool and appealing to you, but how will consumers react to it? Liking an idea doesn’t mean that enough people will want to buy the product to keep your business afloat.

One of the most effective approaches is to focus your market research on finding a problem that your product might be able to solve. For example, there might be people who need a dose of caffeine in the morning, yet they can’t stand coffee and want something healthier than an energy drink. How would you give them what they need?

Alternatively, you can start with more general ideas, focusing them on specific target audiences. For example, students might need an energy fix to help them study. More often than not, as you identify these problems, you’ll also be identifying potential target audiences where you might be able to market the finished product.

  • Transform General Ideas into Product Ideas

The next step after finding your general direction is brainstorming what kind of product may solve the problem at hand. After you think of an idea, evaluate its merit by asking a few critical questions.

How might you produce, pack and distribute this beverage in a way that would best serve your general ideas and the intended target audience? If you can come up with some answers right away, continue the process. If an idea doesn’t yield possible solutions, look for a different one.

  • Evaluate Your Potential Expenses

Before you even start, you need to know how much this business undertaking will cost you — at least in estimates. If you’re thinking of taking out a loan or investing the funds you have already saved, it’s best to be sure what you’re getting yourself into.

One way of ensuring that there will be no unpleasant surprises is taking your general estimation of the budget and then doubling it. Sometimes things go wrong, deadlines are broken, or the testing and development process takes longer than expected and ends up costing more than estimated. Always overestimate to keep yourself safe financially.

  • Get Funding

It is very little you can do without funding, as breaking into the beverage industry can be an expensive endeavor. Many entrepreneurs today try to do it via crowdfunding sites such as Kickstarter and Gofundme, so with luck and some without.

With crowdfunding, their success depends on whether they’ve been able to target their audience well enough to get backers. There are other ways of getting funding, through sponsors, investors or taking out loans. Keep in mind that some paths to funding are riskier than others and that you need to weigh your options well.

  • Do a Lot of Testing

Testing is a crucial part of the product development process. Even if your product is in the final stages of development, you’ll still have to do a lot of testing.

First, your ideas need to be put to the test. After you select one or two, you need to come up with beverage recipe drafts. Testing them will give you a few promising candidates to develop further. Once that part of the process is done, you’ll have to go through the final testing stages of different versions of the recipe. You won’t only be testing the contents and taste of the product, but also its appearance – design and packaging. Settling on the final version of the product will take effort going through many different options.

  • Make a Business Plan

A business plan is immensely powerful as it gives you a sense of direction and a framework to work in. Take your business goals and break them into bite-sized chunks that you can accomplish within a short time frame. Those tasks will be the bare bones of your business plan.

Use SMART goal setting for every part of your product development, marketing and distributing processes, and figure out what you need to get done by what date. This roadmap will stay with you and ensure you’re on the right track.

If you don’t know how to write a business plan, at least develop a PowerPoint that shows a path you will take. At Cascadia, we see and write many business plans. 

  • Find the Right Connections

After you’ve determined your business plan, you’ll also know whose assistance you need to make it happen. You may be gifted in multiple areas and think you can avoid hiring professionals to save some money.

However, no solopreneur would be able to create their product from start to finish, unless they’re product development, marketing, design and science professionals. To get your beverage on the shelves for consumers to notice, you’ll need to work with all of these people, so start making those essential connections early.

  • Make a Marketing Plan

An in-depth marketing plan is a huge piece of the budget puzzle, although new business owners tend to leave it for last. Instead of planning, they use whatever’s left of their initial budget. However, this approach makes it difficult to succeed. The beverage industry is highly competitive, and you need to be able to break through the noise. Without a huge marketing effort, that is almost impossible to accomplish.

However, your marketing doesn’t have to be expensive to be a success. The first step is to think through the strategy of your marketing plan. Who are you trying to appeal to, and have you chosen the right channels to reach them? How can you reach them more efficiently and for less money? That’s the kind of approach any good marketer will take, as the point of it is to get results while not overspending.

Key Takeaways

To break into the beverage industry and be well-informed about the current trends of it, you should follow fresh industry insights. Who knows, it might give you a disruptive idea that will change the business.

By William Sipper, Cascadia Managing Brands