9 Insights From the Beverage Forum
By Steve Holtz on May 04, 2017CHICAGO -- Late last month, about 250 beverage makers and those who make equipment and ingredients for beverages came together in Chicago to discuss the state of the beverage industry and where the future might lead.
Hosted by Beverage Marketing Corp., New York, and Beverage Industry magazine, Troy, Mich., the Beverage Forum offered insights from numerous industry leaders. Indra Nooyi, chairman and CEO of PepsiCo, Purchase, N.Y., was given the Lifetime Achievement Award. Constellation Brands, Chicago, was named Large Company of the Year, and Dr Pepper Snapple Group’s Bai Brands was honored as Small Company of the Year.
Here’s a look at some of the insights shared during the conference …
I am robot
After acknowledging “a very, very good year for the total U.S. beverage market,” Michael Bella, chairman and CEO of the Beverage Marketing Corp., said some extreme changes are on the way—in beverages and beyond. “We live in an era of accelerated change in all food and consumer categories,” he said. “The beverages of tomorrow will be more deliberate, be made with premium ingredients and offer more benefits. Embedded digital sensors will drive replenishment. [And] within a decade, virtually every household should be the home to its own robot.”
A sweet goal
From Erythritol and Stevia to monk fruit and even sugar, the search for a next-generation sweetener continues across the beverage landscape. “The goal is developing a natural, zero-calorie sweetener that tastes like sugar,” said Gary Hemphill, managing director and chief operating officer of the Beverage Marketing Corp.
Speaking of sugar
Sugar taxes continue to vex beverage makers as municipal and state governments look for ways to firm up their budgets under the guise of aiding public health, leading to higher prices at the shelf. Can suppliers fight back? “I would like to believe that [we] will find a more customer-friendly solution to the problem,” said Sandy Douglas, executive vice president and president of Coca-Cola North America. “Taxing people and discriminating against businesses that create a lot of jobs [is unproductive].”
Take your medicine
PepsiCo has been ambitious in addressing concerns about calories in colas and chemicals in diet sodas, so much so that Diet Pepsi is available in at least three different formulations. A big part of the challenge, according to Nooyi of PepsiCo, is getting consumers used to the varying tastes of low-calorie drinks. “We have to nudge the consumer” toward new sweeteners, she said. So we can cut 20 calories every year or so. The customer has to get used to the new taste.”
Low energy?
Recent slow, single-digit growth of energy drinks have some beverage watchers wondering if the category has matured. Robert Otternstein, senior managing director of investment firm Evercore ISI, says that’s not the case if manufactures can begin to capture other demographics. “It will remain a robust category to the extent they can make it appeal to women and older consumers,” he said. “In that case, it could see significant performance [growth].”
Not this Monster
Monster Beverage Chairman and CEO Rodney Sacks acknowledged that the company’s product sales growth has been slow in recent months and that new-product introduction has been slowed by production issues. But he believes relief is on the way in the form of product rollouts and a rejuvenation of the Monster Ultra, Java and Hydro lines. “Monster Ultra has been good for us,” he said. “Once we have some improvements in our production line of Java, we believe that will grow again for us.”
Welcome to the fold
Pete Coors, vice chairman of the board and chief customer relations officer of Molson Coors, says the integration of the entirety of the MillerCoors joint partnership after buying out Anheuser-Busch was “relatively easy” since it was already an operating business. The trickiest part of its AB InBev acquisition? Integrating the Miller beer brand around the world. “The biggest challenge was getting over some cultural differences.”
Back to basics
Now that Molson Coors is the third-largest beer brewer in the world, Pete Coors said he actually finds the company moving away from throwing its weight around. “We need to learn how to be more nimble with rollouts,” he said. “Maybe the big advertising efforts aren’t the way to go anymore.”
Strut your stuff
With Essentia Water packaged in high-weight PET, Chief Strategy Officer Neil Kimberley was asked if there’s concern about not meeting the environmental standards that other brands have achieved. Kimberley doesn’t sweat it. “If you’re going to compete as a budget brand, yes, you’ve got to go down to a 10-gram bottle and you’re limited in what you can do with design,” he said. “But if you’re comfortable being a premium brand, you can do whatever you believe the consumer will pay for.”