Nonalcoholic Beverage Manufacturing
Description
Companies in this industry produce carbonated and noncarbonated soft drinks, bottled water, and ice. Major companies include Coca-Cola, Keurig Dr Pepper, and PepsiCo (all based in the US), along with Britvic (UK), Danone (France), Nestlé (Switzerland), Primo Water Corporation (Canada), Red Bull (Austria), and Suntory (Japan).
The global nonalcoholic beverage market is anticipated to reach about $2.7 trillion in 2034 and is expected to grow at a compound annual growth rate (CAGR) of 7.34% from 2025-2034 forecast period, according to Precedence Research. Most revenue (about $450 billion) in 2024 is generated in the Asia Pacific.
The US nonalcoholic beverage manufacturing industry includes about 1,200 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $45 billion. The industry's products include juice drinks, but makers of fruit and vegetable juices are covered in the Fruit & Vegetable Processing industry profile.
COMPETITIVE LANDSCAPE
Demand for nonalcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large companies have economies of scale in production and distribution. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. The US industry is highly concentrated: the top 50 companies account for about 90% of revenue.
Largely because of the high cost of shipping a heavy product, US imports and exports of soft drinks are relatively low. Imports of nonalcoholic beverages account for about 8% of the US market; exports account for about 3% of US production. Austria, Switzerland, and Mexico are the largest importers of nonalcoholic beverages. Canada, Mexico, and Japan are the largest exporters of nonalcoholic beverages.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include soft drinks, carbonated (about 55% of industry revenue), soft drinks, non-carbonated (about 25%), and bottled water, non-carbonated (about 15%). Soft drinks include sodas (also referred to as carbonated soft drinks, or CSDs), as well as tea and coffee drinks, sports drinks, energy drinks, fruit and vegetable drinks (but not pure fruit and vegetable juices), and artificially carbonated water.
The manufacture and distribution of most national soda brands, including Coke and Pepsi, is a two-tiered process. The primary manufacturer produces a flavored syrup called concentrate that is sold to local bottlers who manufacture and distribute the finished product. In a typical bottling operation, the flavored syrup, corn syrup (sugar), and filtered water are mixed in appropriate proportions, carbon dioxide gas is injected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged.
The two-tiered structure is most efficient for national companies with large volume, because the manufacturing process is simple and because water, the main ingredient of sodas, is expensive to ship and is available locally. Smaller companies combine the syrup production and bottling operations in one plant. For soft drink bottlers, the major raw materials, aside from the flavored syrup, are corn syrup and containers — glass bottles, aluminum cans, or plastic bottles made from polyethylene terephthalate (PET).
Bottlers frequently operate sizable distribution systems, including warehouses and fleets of specialized delivery trucks. Production and distribution volume is usually measured in unit cases of 192 ounces (24 eight-ounce servings), although actual cases of 12-ounce cans contain 288 ounces. In addition to producing canned and bottled soft drinks, large manufacturers sell sweetened syrups to restaurants and other retailers that produce the finished product at the point of sale by mixing the syrup with carbonated water to produce fountain products.
The manufacturing process for most noncarbonated beverages is usually more complicated than the mix-carbonate-and-bottle soda process and therefore is not handled usually by local bottlers. In most cases, non-soda products are bottled by the manufacturer and distributed through the same types of channels - wholesalers, distributors, brokers - used by food manufacturers, although bottlers may also participate. Bottled waters are either bottled at specific springs or made locally from filtered tap water.
Manufacturers and bottlers typically operate under contracts, called bottler agreements, which specify the territory within which the bottler has an exclusive right to make, sell, and distribute the manufacturer's brand in bottles or cans. Fountain products are often sold separately through wholesalers under distributor agreements. Bottle and fountain territories may overlap, and bottlers may also be fountain distributors. Agreements often are perpetual and can be terminated only for breach of contract.
Bottler agreements usually require that container and packaging materials be bought from suppliers that are approved by the manufacturer, and that the bottlers not handle competing products. Agreements also specify the price that the bottler must pay for concentrate. The manufacturer has no control over the prices the bottler charges customers, and usually isn't obligated to spend money for marketing or promotions in the bottler's territory. Often, however, the manufacturer will provide marketing and promotion support.
The global nonalcoholic beverage market is anticipated to reach about $2.7 trillion in 2034 and is expected to grow at a compound annual growth rate (CAGR) of 7.34% from 2025-2034 forecast period, according to Precedence Research. Most revenue (about $450 billion) in 2024 is generated in the Asia Pacific.
The US nonalcoholic beverage manufacturing industry includes about 1,200 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $45 billion. The industry's products include juice drinks, but makers of fruit and vegetable juices are covered in the Fruit & Vegetable Processing industry profile.
COMPETITIVE LANDSCAPE
Demand for nonalcoholic beverages is driven by consumer tastes and demographics. The profitability of individual companies depends on effective marketing. Large companies have economies of scale in production and distribution. Small companies can compete by producing new products, catering to local tastes, or selling at lower prices. The US industry is highly concentrated: the top 50 companies account for about 90% of revenue.
Largely because of the high cost of shipping a heavy product, US imports and exports of soft drinks are relatively low. Imports of nonalcoholic beverages account for about 8% of the US market; exports account for about 3% of US production. Austria, Switzerland, and Mexico are the largest importers of nonalcoholic beverages. Canada, Mexico, and Japan are the largest exporters of nonalcoholic beverages.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include soft drinks, carbonated (about 55% of industry revenue), soft drinks, non-carbonated (about 25%), and bottled water, non-carbonated (about 15%). Soft drinks include sodas (also referred to as carbonated soft drinks, or CSDs), as well as tea and coffee drinks, sports drinks, energy drinks, fruit and vegetable drinks (but not pure fruit and vegetable juices), and artificially carbonated water.
The manufacture and distribution of most national soda brands, including Coke and Pepsi, is a two-tiered process. The primary manufacturer produces a flavored syrup called concentrate that is sold to local bottlers who manufacture and distribute the finished product. In a typical bottling operation, the flavored syrup, corn syrup (sugar), and filtered water are mixed in appropriate proportions, carbon dioxide gas is injected, and the finished soda product is poured into bottles or cans, which are capped, labeled, and packaged.
The two-tiered structure is most efficient for national companies with large volume, because the manufacturing process is simple and because water, the main ingredient of sodas, is expensive to ship and is available locally. Smaller companies combine the syrup production and bottling operations in one plant. For soft drink bottlers, the major raw materials, aside from the flavored syrup, are corn syrup and containers — glass bottles, aluminum cans, or plastic bottles made from polyethylene terephthalate (PET).
Bottlers frequently operate sizable distribution systems, including warehouses and fleets of specialized delivery trucks. Production and distribution volume is usually measured in unit cases of 192 ounces (24 eight-ounce servings), although actual cases of 12-ounce cans contain 288 ounces. In addition to producing canned and bottled soft drinks, large manufacturers sell sweetened syrups to restaurants and other retailers that produce the finished product at the point of sale by mixing the syrup with carbonated water to produce fountain products.
The manufacturing process for most noncarbonated beverages is usually more complicated than the mix-carbonate-and-bottle soda process and therefore is not handled usually by local bottlers. In most cases, non-soda products are bottled by the manufacturer and distributed through the same types of channels - wholesalers, distributors, brokers - used by food manufacturers, although bottlers may also participate. Bottled waters are either bottled at specific springs or made locally from filtered tap water.
Manufacturers and bottlers typically operate under contracts, called bottler agreements, which specify the territory within which the bottler has an exclusive right to make, sell, and distribute the manufacturer's brand in bottles or cans. Fountain products are often sold separately through wholesalers under distributor agreements. Bottle and fountain territories may overlap, and bottlers may also be fountain distributors. Agreements often are perpetual and can be terminated only for breach of contract.
Bottler agreements usually require that container and packaging materials be bought from suppliers that are approved by the manufacturer, and that the bottlers not handle competing products. Agreements also specify the price that the bottler must pay for concentrate. The manufacturer has no control over the prices the bottler charges customers, and usually isn't obligated to spend money for marketing or promotions in the bottler's territory. Often, however, the manufacturer will provide marketing and promotion support.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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