The beverage industry is a mature industry with two main categories- alcoholic beverages and non-alcoholic beverages. These two main categories can be further divided into eight sub-categories. Distilled spirits, wine and brewing are the sub-categories under alcoholic beverages. Meanwhile, the subcategories under non- alcoholic beverages include fruit juices bottling, canning and boxing; soft drink syrup manufacture; soft drink and water bottling and canning; the coffee industry; and the tea industry.
The Workforce of the Industry
The beverage industry is very competitive with a wide array of products available in the market from small brands to the leading multinational brands. The annual gross revenue of each category of beverage industry is in millions of dollars. Millions of people are employed in the beverage industry. Workers in the beverage industry from several small developing countries heavily rely on tea and coffee plantation as their primary source of income.
Even though the production process and the ingredients might vary significantly in different categories of the beverage industry, the workforce in general exhibit a lot of similarities. Usually, low-income, unskilled individuals or families are employed for the process of harvesting raw materials in the beverage industry such as barley, hops, coffee beans, or grapes. Whereas, the processing stage employs semi-skilled people. This processing workforce is usually supported by a group of highly skilled employees consisting of accountants, engineers, manufacturing managers, and food safety technicians or quality assurance.
The products manufactured by the companies in the beverage industry usually distribute them to wholesalers through common carriers in comparison to the manufactures of soft drinks who prefer to deliver their products directly to retailers with their own drivers. The drivers delivering these soft drinks to the retailers make up almost 14% of the overall workforce in the industry. The following flowchart depicts the basic bottling operations in the beverage industry.
Characteristics of the Industry
Except for the soft drink industry where the majority of the market share is enjoyed by a few multinational companies with strong networks around the world, the beverage industry is heavily fragmented. The year 1970 saw the start of an ongoing consolidation in the industry which has seen the multinational players shape the landscape of the industry.
The early 1900s marked the start of the evolution of the market landscape when a lot of companies started to evolve from regional companies serving the local community to huge multinational companies with large production and distribution network around the world. The advancements made in technologies related to mass production and product packaging in association with global integration of the national markets have led to the expansion of business for the companies in the beverage industry. Because of the availability of low-cost workers in emerging economies, many companies in the beverage industry have relocated their manufacturing plants to emerging economies to achieve economies of scale.
During the late 1990s, the demand growth in developed economies in North America and Europe started to show the signs of a saturated market whereas, the emerging economies of Asia and South America offered a lot of potential for growth for the beverage companies. In recent times, the demand for alcoholic and non-alcoholic beverage in developed economies has remained flat owing to an increasing focus on a health-conscious environment. Whereas in the emerging economies, the demand for alcoholic and non-alcoholic beverages has experienced rapid growth mainly due to the increasing purchasing power of the people and a growing population base.