November 22, 2017      3 min read

The beverage industry is highly competitive, which is why it is important to be efficient and stay up-to-date with nutritional trends and consumer tastes. Understanding the challenges and opportunities in both the industry and the market are important for any beverage manufacturer.

Revenue in the beverage industry stems from the demand that is driven by consumption, population growth, consumer tastes and disposable income. However, the profitability of each company depends on how efficiently it is run. Beverage companies are competing on the basis that they can distribute a finished, desirable and quality product better than their competitors, however it is an extremely competitive industry where manufacturers are competing to develop similar alternative products for consumers. Companies also feel pressure from both consumers and competitors, which may make manufacturers lower their prices. While competition alone is a challenge in this industry, the following are a few other forces that present challenges.

Technology

In order to remain relevant, manufacturers have to be able to test and launch new products that accommodate consumer trends and taste preferences. Technology and processes should be equipped to adapt to automated processing of packaging while producing healthy products. Advanced technology shows us that every industry is widely machine-controlled. Industry experts need to understand cold-type production, technological improvements, and automation. Keeping up with consumer trends and the latest innovations in technology for convenience in beverage processing and packaging is another important aspect when looking at the challenges in the beverage industry.

Pressure to be environmentally friendly

Consumers are increasingly making sustainability a priority in their purchasing decisions. They look for products with minimal packaging and with materials that can be recycled. However, it can be a challenge to find or produce packaging that meets those qualities while still being able to be affordable. Such packaging needs to serve its purpose, while being able to at the same time withstand transit to its final destination.

Demand for local products

Local products are becoming more popular in the market. However, these products can be more expensive and more difficult to acquire in sufficient quantities. The rise of farmers markets and independent stores and restaurants can draw some consumers away from larger chain stores because of their ability to offer these local items.

Managing suppliers for the beverage industry

Beverage procurement tends to involve a large number of suppliers, even for smaller businesses. Finding good suppliers and favourable deals, as well as keeping up with changes in pricing, terms, and other factors, can be a very complex task. Great stock inventory software and staff are essential to getting the most value from the supply chain.

Meeting demand for organic ingredients

Growing numbers of consumers are demanding organic products, but these items are by nature more difficult to produce, ship, and preserve. Because of the difficulties in converting a farm into one that can produce organics, as well as producing acceptable-quality products without the use of pesticides, it can be a challenge for purchasers to find sufficient supply. It also becomes necessary to have multiple suppliers from different regions in order to obtain a necessary variety of products.

Online ordering

While unperishable industries, like appliances, electronics, and other domestic products that have already established their presence in the e-commerce domain, the beverage sector has been relatively slow. This is one of the major challenges in the beverage industry, considering that consumers are more tech-savvy and socially informed due to the internet. Wholesalers and retail industries have already begun to invest in beverage e-commerce, but it is essential that manufacturers adopt e-commerce in their marketing tactics, which might eliminate risk to the supply chain.

The challenges in the beverage industry are primarily owing to fierce competition. New markets, changing consumer spending, increasing prices, global consumer preferences that are changing, and advanced technology are envisioned to bring about extensive changes in the beverage industry in the next few years.

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