Rising fuel and aluminum prices against the uncertainty of a war in Iran and the highest annual inflation rate since May 2023 have caused increasing angst among US beverage bottlers and distributors. BD informally surveyed executives across the Coca-Cola, PepsiCo, Keurig Dr Pepper, and independent beverage distribution systems during the past week to find out what cost and profit margin pressures they face now, and what additional pressure they expect. The bottlers also discussed concerns about the revenue side of their P&Ls as consumers look for ways to better afford high grocery and gas prices. During the first-quarter earnings cycle in recent weeks, Coke, PepsiCo, Keurig Dr Pepper, Celsius Holdings, and Monster Beverage all addressed current and anticipated commodity inflation pressure this year, while adding that the costs are mostly manageable so far. “We expect beverage companies will feel margin pressure in 2026, with likely pricing actions in 2027,” RBC Capital Markets Beverage Analyst Nik Modi wrote in a May 7 research note, citing higher costs for aluminum and fuel. Much of the pressure is falling on distributors who own and fuel the trucks that move beverages and buy the aluminum cans that drinks are packaged in. One bottler called it a “perfect storm” of cost pressures. The following is a summary of responses and key themes that emerged from more than a dozen discussions:
Diet Coke is capitalizing on its current social media renaissance by bringing back Diet Coke Lime, complete with retro packaging. The drink hit shelves nationwide this week. “Known for its crisp refreshment with a zesty lime twist,” Coca-Cola said in a statement, “Diet Coke Lime was a breakout...
The pandemic put a temporary chill on choice as CPG companies waded through supply shortages and retail disruption to keep core products on the shelf. As we move further away from crisis mode, expect to see a return to the kinds of customization and personalization that was growing prior to the global upheaval.
Here are a couple of examples that have come across my desk in recent months:
Dream Tea NYC — A consumer answers a few basic questions so the company can create a personalized small batch tea blend for them. BD’s Laura Stanford, a hot tea drinker, gave the program a try. She chose loose leaf chamomile tea with added lavender, bergamot, and vanilla. The can, which she selected in green, was printed with her first name and a list of tasting notes: honey, smoke, citrus, vanilla, and “inspiration.”
Pax — The product is sold in a resealable pouch containing drink mix packets — three each of Cranberry Cosmo, Margarita, Pineapple Paloma, and Moscow Mule. The flavor mixes can...
