ASRS Supports Beverage Growth in an Innovative Industry

How AS/RS can support SKU growth caused by emerging categories in beer, spirits, and fine wine

Let’s face it, with the economy steadily increasing consumer preferences are changing, escalating the consumption of craft beer, wine and premium spirits. Consumption of such beverages is creating a steady growth for the alcoholic beverage industry, generating opportunities for manufacturers to increase production. As consumers continue to demand a wide variety of flavors, beverage manufacturers continue to create new and innovative beverage delivery systems to support this demand.

Aaron Corcoran, a 20 year veteran in the material handling and logistics industry recently conducted a beverage webinar, “How AS/RS can support SKU growth caused by emerging categories in beer, spirits and fine wine.” SKU proliferation is the largest change the industry has seen in the last decade, and more SKUs must be accounted for in many ways. The following key trends are discussed in the webinar.

Key Industry Trends

Beer:

• Consumers are shifting their taste and moving towards more regional craft beers which result in diversification of the manufactures product line.
• Target demographic consumes 80% of the regions beer by volume
• Continued consolidation among the industry's largest breweries has facilitated larger manufacturing at lower per-unit costs
• Greater international exposure of major brands
• Seamless distribution agreements with downstream wholesalers
• A portfolio of brands that appeals to different consumers and drinking occasions will increase market outreach and can protect firms from the adverse effects of sudden shifts in consumer taste preferences.

Wine:

• Wine consumption is increasing throughout the U.S.
• Wineries are undergoing massive manufacturer consolidation
• Increasing industry concentration as major holding companies merge or acquire smaller producers.
• Increase in consumers knowledge about wine, signaling potential growth opportunity with declining interest in premium beer brands

Spirits:

• Continues to grow as a result in the rise of disposable income levels and expanding populations.
• Consumers are premiumizing, or trading up their beverage choices, resulting in expanding profit margins for the industry.
• Consolidation and mergers, automation will help boost profit margin. Operators have boosted the efficiency of spirit production by automating the production process and integrating technologically advanced machines to reduce their reliance on manual labor.

As the beverage industry continues to grow and generate more SKUs, distributors and wholesalers are struggling to find the necessary space for storing products. At the same time, warehouse space is at a premium and new construction is far too expensive. There is no need for off-site storage, existing expansions, or costly construction.

Learn more and see an example of how one beer distributor used data analysis to determine building extension.