Dominant Trends In The Beverage Industry

Wednesday, November 10th, 2021

Beverage manufacturers are working on new flavours, new formats, and new packaging, creating challenging production realities.

In the years ahead, beverage manufacturers are striving to meet consumer demands for more sustainable packaging, functional and convenient beverage formats, and healthier product offerings. Extract from PMMI Business Intelligence Report, 2021 Beverage Trends Driving Change.

In recent years, the beverage industry has been in a state of ongoing change as manufacturers adapt to shifting consumer preferences and demands. Beverage consumers have become more discerning in their purchases, requiring manufacturers to make adjustments to everything from the basic formulation of their products to protective packaging.

Consumers are more often looking for beverage products that provide added functionality to their lives, enhance their overall health, and are available in convenient formats for hassle-free consumption. In addition to these traits, consumers are increasingly concerned about the sustainability of beverage packaging. All of these trends have led to a significant expansion of SKUs in the beverage industry as manufacturers roll out new products, new formats, and new packaging to adapt to consumer desires.

Opportunities Abound For Beverage Suppliers

The dominant trends in the beverage industry—sustainability, functionality, convenience, and health consciousness—are driving SKU expansion and the demand for innovative products. Beverage manufacturers are working on new flavours, new formats, and new packaging, creating challenging production realities. Many of those interviewed stated these challenges have also created a need for equipment and line improvements.

In addition to these trends already changing the face of the beverage industry, the pandemic has generated increased interest in e-commerce, product safety, and active health management. The events of the past year disrupted traditional supply chains and nearly all the beverage manufacturers interviewed stated they are experiencing sourcing shortages for both materials and ingredients.

To keep up with consumer demand, beverage manufacturers are having to re-examine key aspects of their production and packaging. In general, they are seeking to add greater efficiency to their entire operation by making machines “smarter” and updating older equipment with modern technology. Beverage producers are turning to digital technology and automation/robotics as strategies to streamline production, maximise uptime, minimise product waste, and reduce user interface.

These improvements often necessitate new machines and new lines, in addition to building a team of expert advisors to achieve production goals. OEMs have a large role to play in responding to these goals and beverage companies are increasingly looking to OEMs that can provide turnkey solutions. With 50 percent of beverage manufacturers interviewed stating they expect their capital budgets for equipment to increase in the next few years, OEMs have ample opportunity to collaborate with beverage companies and secure new partnerships.

There are several strategies that manufacturers can consider to make their products more sustainable, but by far the most important is reducing the overall amount of plastic utilized in their packaging. Plastic has become a hot-button issue for consumers, especially given the mounting statistics demonstrating the damage improperly discarded plastic does to the environment.

To achieve lower levels of plastic usage, manufacturers have turned to a variety of solutions that include reducing their overall packaging material requirements, exploring sources of renewable and recycled plastics, and adopting alternatives to plastic altogether.

Plastic Reduction

One of the most common strategies being deployed by beverage manufacturers to make their products more sustainable is reducing the amount of plastic in packaging. Manufacturers are now making bottles with thinner side walls and actively finding ways to significantly reduce the plastic required to form adequate neck and closure systems. While this strategy seems straightforward in regards to sustainability, it creates a host of challenges for manufacturers when it comes to actually producing these light-weighted bottles at full speed to achieve maximum output. These material reductions result in thinner overall barriers on bottles, meaning they often cannot be handled in the exact same way. In many cases, careful adjustments must be made to machinery to prevent issues such as tears and malformation that can slow or stop production. In some cases, these variances in strength and speed tolerances necessitate the purchase of new machinery, and sometimes entirely new production lines. This has made machinery that is capable of running at a variety of speeds and handling an array of recycled content in materials increasingly attractive to beverage manufacturers.

Increasing rPET

A growing solution to plastic reduction being explored by beverage manufacturers is switching from virgin plastic to recycled plastic, commonly referred to as rPET. This is a rapidly growing trend, with 89 percent of manufacturers interviewed actively looking to incorporate more recycled material into their packaging, and 67 percent already in the process of transitioning PET bottles to rPET. The plastic reductions realised through these strategies are significant, especially at the largest beverage producers: one leading beverage company expects to eliminate 46.3 million pounds of virgin plastic usage annually by switching to rPET, while another leading beverage company states their overall virgin plastic usage will be reduced by 20 percent across the board by switching only select brands to rPET. These reductions are significant, although challenges still remain in both sourcing and utilizing rPET.

With the low PET recycling rate of 30 percent in the US (which is even lower for bottles specifically, at 25 percent), many manufacturers utilising rPET are running into supply chain shortages that hamper production and slow future product development plans. In addition to supply chain challenges, rPET creates a new set of considerations on the production side, as the material is not as reliable or consistent as virgin plastic. Manufacturers have had to address problems with undesirable haziness in the material, as well as unpredictable variances in quality that affect overall strength.

These challenges have spurred beverage manufacturers to seek out machines that are flexible and easy to adjust, allowing them to accommodate fluctuations in the quality of rPET. It is particularly important that machine manufacturers focus on equipment that can be easily recalibrated to handle a variety of strength tolerances and speeds, and can be quickly cleared and reset in the event of unexpected stoppages caused by rPET material variances.

New Material Types

One of the most obvious ways to reduce plastic usage is to switch to an entirely new format of packaging altogether, such as glass, metal, or paperboard. While these formats are less popular than the dominant PET share, beverage manufacturers are increasingly looking at alternatives to plastic packaging. Consumers are aware of the sustainability benefits that can be derived from packaging other than plastic; for instance, 51 percent of consumers rated glass as “extremely eco-friendly” when surveyed. While glass currently makes up only 10 percent of the US beverage market, industry experts have noted a recent uptick of interest in glass packaging.

Cans, Cans, & More Cans

There has been recent interest amongst beverage manufacturers in using more aluminium cans as a way to improve sustainability, especially in the US, where cans are recycled at a rate of 50 percent. When compared to PET, these recycling rates alone make aluminium cans an attractive sustainable option, which is enhanced by aluminium’s ability to be recycled and reused almost indefinitely.

These format changes for beverage packaging often require manufacturers to make several additional equipment purchases, especially when making major shifts such as moving from PET bottles to aluminium cans. To mitigate some of these costs, machine manufacturers should aim to make their equipment capable of handling a wide variety of formats, such as filling machines that can accommodate both glass and plastic, or equipment that can adapt to a number of different shapes and sizes. While no machine can realistically accommodate all format types and efficiently seal them, OEMs can still strive to make their machines as versatile and Industry 4.0 ready as possible.

Sustainability Requires Flexibility

More than anything else, the shifting strategies employed by beverage manufacturers to achieve greater sustainability require machines that are highly flexible and dynamic, including being capable of handling a range of speeds, strengths, sizes, and shapes. By designing machines to address these needs, equipment manufacturers can help beverage producers position themselves to readily accommodate future sustainability strategies and growth.

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