Private Label Beverages

Consumers have an ever-growing array of choices in the beverage aisle, ranging from name brands like Coke and Pepsi, to private label drinks such as Safeway Select. A 'private label' beverage brand, are usually owned by producers who wish to participate in a robust category with their own line of beverages. Historically, private label brands or 'me-too' value-oriented brands offer lower quality but better prices than name brands. However, this perception has changed over the years, as private label offerings have significantly improved in quality and consumer satisfaction. Private label has a presence in virtually every beverage category in the U.S. Store brands are private label products. They are in the largest and the smallest of beverage categories. Carbonated soft drinks, milk, bottled water and juices are prime categories for private label beverages. Although carbonated soft drinks remain popular, as the market has evolved and consumer tastes have shifted, private label has moved into the non-carbonated category which includes bottled water and fruit beverages, as chronicled in the 'Private Label Beverages and Contract Packing in the U.S.' report, conducted by Beverage Marketing Corp. Branded products like Coke, Pepsi and Dr Pepper still dominate the industry, but the sheer size of the carbonated soft drink category has created an opportunity for private label brands. For the most part, the leading companies have done an effective job at blunting further inroads of private label through strong marketing of their products, leveraging their vast distribution network, and by pricing their products so that they are more in line with private label pricing schemes. The milk category boasts the largest and most developed private label activity. In 2007, private label account for more than 62% of U.S. fluid milk sales. Milk is the only category with more than half of its sales in private label. The greatest amount of private label milk sales are in non-fat, low fat and whole milk, while a smaller percentage of sales come from flavored milks and milkshakes. Consumers may not be as brand loyal with bottled water as with other categories. However, a large number of branded waters are experiencing success in the market, but this varies by water type. Waters that often serve as substitutes for tap water, such as so-called retail bulk water in large packages, tend to have the greatest amount of private label. Over 42% of retail bulk water sales were private label a few years ago. Private label juice well represented within the U.S… This may provide an opportunity for private label because consumers may be less brand-loyal. In a recent sample, over 14% of shelf-stable fruit beverage sales in supermarkets were from private label. Once again, the category segment lacks significant differentiation that offers solid returns for private label. The branded leaders in this category have managed to withstand private label through strong branding and marketing, often revolving around package design and a promotional focus on the purity of their product. It is also notable that similar to milk, branded products have greater strength in the flavored segment of their categories. A private label brand can help retailers take advantage of a robust industry segment with a high quality product that suits customer needs.

Drink Manufacturing History

The drink manufacturing process in the United States, European Union and Asia, are among the most efficient manufacturing processes in the world. Because of the enormous scale of the drink industry, American, European and Asian drink manufacturers have become increasingly better equipped to manufacture drinks at high speed and low cost while maintaining high standards of quality. Drink manufacturing has a long history, tracing its origins to when drink manufacturers were simply tea brewers, wine growers and home producers. Back then, they produced a little more than they could consume and sold or bartered the rest, giving birth to a new livelihood. Drink manufacturing streamlined and became manufactured on a much larger scale. Vineyards flourished growing more and more grapes that would con into wine, tea plantations produced more tea and facilities that could manage the drink manufacturing process on a regional scale began to spring up to address the growing demand. This growth continued, until the day that Coca-Cola, founded in 1886, became one of the first major international drink manufacturers. Milestones in the Drink Manufacturing Industry 1966: Gatorade was born. Soon it would become the worlds first popular sports drink, and drink manufacturing would never be the same. 1971: Starbucks emerged, putting Seattle on the drink industry map, indicating another turning point for the industry. 1972: A couple of natural food storeowners wondered if the drink industry was ready for a healthier alternative beverage. Since then, Snapple has kept drink manufacturers busy for over 35 years. 1978: Perrier and Evian became the first widely available bottled waters in United States. 1980: Until Odwalla, the only way to get fresh juice was to squeeze it yourself. The drink industry has changed for the better with this innovative company. 1981: Red Bull energy drink started its iconic rise to become one of the most successful drink manufacturers in history. 1982: Diet Coke became the nation's favorite diet soda. 1992: Pepsi-Cola revolutionized drink distribution by including Lipton and Ocean Spray as part of its drink distribution strategy. 1995: Pepsi introduced Aquafina, and Coca-Cola introduced Dasani. Now bottled water is one of the largest segments of the drink industry and is here to stay. 1996: SoBe defined the functional drink category. 2007: Coca-Cola buys vitaminwater for a record $4.1 billion dollars, and the drink industry keeps growing.