Non-Alcoholic Beverage Distribution

The beverage industry is made up of two sub-sectors; the alcoholic and the non-alcoholic industries. The supply chain in each sector follows different trajectories and bear little similarities depending on the economic environment and government regulations.

Products of the non-alcoholic beverages industry are collectively known as liquid refreshment beverages (LRB) and they include bottled water, carbonated soft drinks, energy drinks, sports beverages, fruit beverages, and ready-to-drink coffee and tea.

The demand for non-alcoholic beverages has been reportedly high. On the global scale in 2016, the industry was valued at 967 billion dollars and was projected to grow by 5.8 percent. This rising interest and consumption of non-alcoholic beverages are due to changing consumer behaviors.

For health and safety issues, and also preferences, consumers are getting more concerned about making conscious choices about the kinds of foods and drinks they consume.

In the United States, the non-alcoholic beverage sector operates a unique distribution system. Instead of the three-tier system observed in the alcoholic beverage industry, distribution in the non-alcoholic beverage industry is, mostly, a direct connection between the manufacturers and the retailers, and even the consumers.

This distribution system is what enables large soft drink manufacturers to expand their market reach and sustain their acceptability. And also make it difficult for smaller brands to penetrate the market.

The choice of distribution channels for non-alcoholic beverages is dependent on certain factors.

The marketing strategy of the beverage manufacturer and the kind of beverage are important factors that contribute to how the beverage product is transported from the manufacturing plants to the consumer’s reach. Direct distribution channels like vending machines and convenience stores may be utilized if the manufacturer’s goal is to minimize cost or penetrate an existing market.

On the other hand, dairy beverages cannot be passed for too long in a distribution chain. Otherwise, big losses await the manufacturers.

There are a lot of safety precautions and strict regulations that must be followed in the production and distribution of food and drink products. Many regulatory bodies are dedicated to ensuring compliance and they monitor every step and process in the industry. There are strict rules guiding the production processes, there are also regulations that guide the distribution process. Strict compliance with the rules is necessary to ensure that the product is received in a wholesome condition. And the manufacturer does not run at loss.

Distribution is the soul of the beverage business. The unique supply chain and distribution system in the non-alcoholic beverages industry is its greatest asset. However, for the industry to realize its full potential, industry stakeholders must find creative ways to handle the pressure of the ever-increasing demand for more by consumers.

Soft drink manufacturers like Coca-Cola have extensive distribution channels that transcend conventional distributors. They deliver their products directly to retailers who sell to the consumers in most cases. Wholesale distributors are involved, but they are not the sole distribution channel.