The beverage industry is growing even as rising health concerns over sugar and alcohol intake are drastically altering consumer buying preferences. How do beverage manufacturers address these concerns, improve operations and find beverage market success? The answer is with beverage software specially designed for manufacturers like them.
Let’s look at the growing beverage industry, its current trends and how ERP software can help ensure beverage market success.
What’s Trending in the Growing Beverage Industry
According to MarketResearch.com, the global beverage market is expected to reach US$1,859.278 billion by 2026—up from US$1,561.084 billion in 2019. A portion of the growth can be attributed to the rise in disposable income in major developing regions, where consumers are willingly spending their money on ready-to-drink beverages, alcoholic drinks and bottled water. Additionally, mergers, acquisitions and product launches are shaking up the growing beverage market.
Current Beverage Trends
As consumers with deeper pockets ponder their expanding alcoholic (e.g., beer, wine and spirits) and non-alcoholic (e.g., water, milk, juice, coffee, etc.) choices, there are a number of trends happening in 2023 that will affect their decision making. Let’s take a look:
1. Snubbing sugar
The CDC reports that 3 in 5 Americans over the age of two exceed their sugar consumption per day, with 24% coming from sugary drinks, 11% from sweetened coffee and tea. The result? Potential issues like weight gain, type 2 diabetes, high blood pressure and tooth decay.
The beverage industry is keenly aware of these concerning statistics, and as a recent PatSnap article notes, is “experimenting with new ingredients” as a way to “minimize any negative externalities associated with sugar consumption.” For example, beverage makers are tapping existing sweetener alternatives, like stevia and allulose, as well as Xylitol, Erythritol and Sorbitol to help alleviate consumer concerns.
2. Crushing on cannabis-infused beverages
Like the beverage industry, the cannabis industry is growing. A Grandview Research report indicates that the U.S. cannabis market may expand at a compound annual growth rate (CAGR) of 14.2% from 2023 to 2030, noting that it’s “often used in the cosmetic, pharmaceutical, and food & beverage industries.” Unfortunately, cannabis manufacturers face fairly severe headwinds due to the fact that medical and recreational cannabis continues to be illegal at the federal level.
But large drink corporations, according to PatSnap, are still seeing cannabis beverages as a viable product. They’re “creating new products or starting new brands or partnerships with a cannabis focus,” citing Molson Coors’ subsidiary Veryvell and Pabst Blue Ribbon’s non-alcoholic “high seltzers”—which contain 10 mg of THC—as examples.
“Although it’s inevitable that cannabis will be a significant part of the beverage market in the future, it’s still considered somewhat risky right now,” PatSnap notes.
3. Moving forward with functional drinks
If the CDC had its way, people would replace all of their sugary beverages with water, but is this idea rooted in reality? Maybe.
The beverage industry is happily experimenting with functional water, which PatSnap describes as water that “contains healthy additives such as botanicals, vitamins, minerals, and oxygen” that can help with better immunity or digestion. PatSnap also notes a Fortune Business Insights’ statistic that shows the functional waters market could reach a value of $18.24 billion by 2025.
4. Planting a stake in plant-based alternatives
Consumers of coconut water and milk made from soy, almond, cashew, flax, rice or oats (and more) are already participating in the plant-based beverage trend. The global plant-based beverages market is expected to grow at a CAGR of 12.7% from 2022 to 2030, per a Grandview Research report. The reason? Grandview Research explains:
Plant-based beverages, such as milk and smoothies, are witnessing high demand owing to their health benefits, nutritional properties, and least contribution to the global carbon footprint. These beverages are not only consumed by health-conscious people but also by lactose-intolerant consumers. The increasing trend of veganism is also promoting the demand for plant-based beverages across the globe.
Regarding the limited carbon footprint, PatSnap says the sustainable nature of plant-based beverages in conjunction with promoting sustainable packaging, such as cellulose and polymer options as well as using nanocomposites, can attract eco-conscious customers.
5 Ways ERP Software Helps Ensure Beverage Success
These current trends all have something in common: they reflect current consumer preferences. To consistently accommodate consumer demand, beverage manufacturers must have the tools in place to be flexible, creative and operationally agile. But that’s not easy to do if they’re using outdated technology and software systems.
That’s why it’s necessary for them to rely on modern beverage business software that provides the functionality beverage manufacturers require to address:
1. Changing Tastes
Changing consumer demand for seasonal products, healthy options, infused ingredients and different flavor profiles make production challenging. ERP software helps ensure production flexibility while accommodating changes in production and keeping track of multiple recipes.
2. Unexpected Growth
Unanticipated expansion can hurt growing companies that don’t have the right tools in place to effectively manage. It’s critical to have a modern ERP solution that can scale quickly and integrate disparate systems (such as accounting, production, warehousing, etc.) in response.
3. New Product Development and Developing Regulations
Opportunities emerge as consumer tastes evolve. Cannabis-infused drinks, for example, require creating new processes and recipes, obtaining new licenses and abiding by state and local regulations. ERP solutions designed for the food and beverage industry fully support compliance and best practices.
4. Batch and Process Manufacturing
Functionality for process manufacturing is critical. Why? Essentially, relying on generic solutions for discrete manufacturing or accounting-only software that lack functionality may force beverage manufacturers to adapt operations to work for their solution when it should be the other way around. Beverage manufacturers should implement an industry-specific ERP solution with Production Management capabilities that allows them to:
- Make better production decisions with real-time operational and financial insights.
- Simplify production scheduling and minimize production line setup.
- Improve operational efficiency and reduce production waste.
5. Quality Control
Finally, quality and compliance can make or break beverage manufacturers. It’s vital to have transparency into supply chains that can source, create and distribute products efficiently and safely—something an ERP solution can provide. Additionally, because ingredients have a shelf-life, beverage manufacturers need tools like an ERP solution in place that can anticipate consumption, monitor shelf life and manage allergens.
And the solution can help support multiple compliance standards (e.g., SQF, BRCGS, FSMA, GMP, HACCP and HARPC) with robust quality and audit capabilities; assure conformance to specifications; ensure safety with full lot/serial traceability, product recall management and comprehensive allergen tracking; offer role-based testing and control; and more.
Conclusion
Finding beverage market success requires a commitment to the quality of their product as consumers continually change their minds and regulations constantly evolve. With the right ERP solution, beverage manufacturers have the exact tool in place to ensure quality and operational flexibility and customer satisfaction.Wondering which ERP solution is best for your beverage manufacturing business? Check out FoodBusiness ERP—beverage business software built in Sage X3 — and reach out to NexTec consultants with any questions and to schedule a demonstration.