When it comes to their health, U.S. consumers have their share of concerns. According to Bellevue, Wash.-based The Hartman Group’s “Health and Wellness 2015” report, on average consumers are actively treating 3.4 health conditions and proactively preventing 6.2 health conditions. The No. 1 health condition — weight management — has 58 percent of consumers treating the condition and 26 percent preventing it, the report notes.
This is just one of the factors driving the demand for high-quality, healthy food and beverages, the market research firm notes. However, as more beverage manufacturers look to satiate these consumer trends, they are turning to experts in the contract packaging and manufacturing industry to help provide solutions.
“What we at NVE are noticing in ‘emerging trends’ is that more private-label and custom-label customers are requesting that their products are manufactured with healthier, more natural ingredients as well as with unique flavor profiles,” says Karen Finocchio, vice president of marketing for Andover, N.J-based NVE Pharmaceuticals. “Although these trends have been on the rise for quite some time, now, more than ever, aggressive customer interest seems to be pushing the industry toward identifying and making available new sweetener alternatives as well as healthier, unique sources of flavors.”
Brian Dworkin, president of Latrobe, Pa.-based Castle Co-Packers, says he has noticed four major trends in the market: simple ingredients and elaborate packaging, products featuring probiotics or kombucha, chain retailers wanting to eliminate products with food coloring of unnatural ingredients and grocery store private label.
“Currently grocery stores are trying to be as innovative as brands and [this] has opened up a ton of business for co-packers like us that are open to developing proprietary products just for them,” he says. “In the past, grocery stores were limited to having the same products as other stores they competed against, and all it was is a label change to their own name.
“Now, they can use a private-label product to attract people to their store because they have their own product that nobody else has,” he continues. “It becomes a destination product.”
Darold Sauber, director of business development for beverage and the dairy foods division for Kansas City, Mo.-based Dairy Farmers of America (DFA), also highlights how beverage-makers are identifying trends that help their brands stand out on the retail shelves. “As a contract manufacturer, we are consistently adapting to consumer trends as brand owners try to differentiate themselves from their competition,” he says. “Current trends include segmented products, such as GMO free, organic, Kosher, etc. These trends affect the formulation and sometimes packaging of products, which require changes to our processing protocols and, sometimes, our equipment.”
Noting the increase of functional beverages, dietary supplements and sports nutrition, Dade City, Fla.-based Southeast Bottling & Beverage has streamlined its operations. “We have developed and made available to our customers a network of resources to help in the development of these types of products,” says Bill Foley, chief executive officer of Southeast Bottling & Beverage. “In the case of dietary supplements, we have acquired facility certifications specifically to the [Food and Drug Administration] (FDA) dietary rules to ensure compliance.”
Eric Miller, chief executive officer of Brooklyn Bottling Group Inc., notes that the beverage market has seen proliferation of non-carbonated, lower-calorie products. Currently the company is able to produce non-carbonated hot-fill in aluminum cans, glass and PET bottles, and, by early spring, will add non-carbonated cold-fill capabilities. “That will enhance the abilities to have a lower cost carb, whether it’s zero calories or blended low calorie,” he says.
The Milton, N.Y.-based company also has noticed an increase in the “boutique” beverage category. These products include cold-fill carbonated soft drinks, which are looking to stem the tide of the influx of non-carbohydrate beverages in the market, Miller explains.
As beverage-makers embrace an innovative mindset, co-packers are keeping an eye on these trends to ensure that they have the capabilities to support product evolution.
“If we want to participate in the emerging trends category, then we have to prepare for the variety and complexity that these trends bring,” DFA’s Sauber says. “Everyone wants to be tied to the next big thing, and unless you can guess what consumers will like, you have to be prepared to play in a lot of venues.”
Sauber adds that the company closely monitors marketplace trends and uses its innovation center to be on the front-end of them. “The DFA Innovation Center has been formulating different styles of products in preparation for these trends,” he says. “We continue to monitor the newest trends and formulate products and processes to meet them, so when we are asked by our customers, we are ready.”
The innovation center is staffed with food scientists who can create formulas provided by brand owners from scratch, Sauber explains. “We then take these formulas, which contain dairy or dairy ingredients, and package them in an aluminum or steel can, or a glass bottle, and retort them so that the product is shelf-stable,” he explains. “Our products generally achieve a shelf-life of nine months or longer.”
Although DFA primarily produces dairy products, the company also can manufacture non-dairy alternatives such as coconut water.
NVE’s Finocchio notes that the growth of emerging categories is ensuring that co-packers are in-line with the times so that they can provide the flexibility their customers need and want for their growing product lines.
“NVE embraces the changing marketplace by purposefully purchasing, tooling and retooling equipment,” she says. “Our up-to-date, state-of-the-art facilities feature five high-speed, energy-shot-filling lines, capable of manufacturing more than 35 million bottles per month.”
The company also utilizes an 8.4-ounce carbonated, cold-fill beverage line that is capable of producing more than 800 cans a minute, Finocchio adds. “Technology and speed as well as flexibility have been the cornerstone to our success,” she says.
NVE can package products for the energy shot, and carbonated energy drink and water categories, where it can accommodate liquid functional shots in sizes from 1.7 to 10 ounces, 8.4-ounce carbonated drinks, as well as filling and sealing of single-serve coffee and tea pods.
As beverage company demands become more diverse, co-packers will continue to make capital investments to accommodate their needs. “We have invested heavily in equipment that can be changed over to all the needs we think are possible,” Castle Co-Packers’ Dworkin says. “This is labelers, case packers, specialty cappers, tunnel pasteurizers, orienting equipment and bag-in-box equipment.”
Dworkin adds that construction of a new plant, which has been two years in the making, is almost complete. At its current capacity, Castle Co-Packers features nine lines with speeds ranging from 4 to 600 bottles per minute (bpm). With packaging size options ranging from 2 to 64 ounces in PET, glass and bag-in-box formats, the co-packer can produce products for the following categories: hot-fill tea/juice, cold-fill carbonated/tunnel pasteurized, kombucha/probiotics, bottled water and cold-fill still products.
Southeast Bottling & Beverage’s Foley notes that providing beverage-makers with a suite of services with a menu approach is how the co-packer helps its customers address the development and manufacturing of their products.
Featuring three lines, Southeast Bottling & Beverage serves the ready-to-drink and dietary supplement markets. Its line speed capabilities include
100 bpm for liquid shots and 150 bpm for containers 8 ounces and above. The company also can handle box or tray counts ranging from four to 24.
To accommodate the burgeoning beverage market, Brooklyn Bottling also has made its share of investments. Between the end of 2014 into early 2015, the co-packer installed a 90-valve filler to boost its capacity in cold-fill carbonated drinks. The clean-in-place system it will add in the spring will enable the company to run cold-fill non-carbonated products.
In addition to these capabilities, Brooklyn Bottling has four packaging lines that can accommodate 12-, 16- and 24-ounce traditional cold-fill carbonated soft drinks and hot-fill non-carbonated drinks. It also can handle 64-ounce PET hot-fill, single PET hot-fill, single-serve glass hot-fill and 12-ounce glass carbonated. The company also has blowmolding capabilities to custom blow and fill bottles, based on volume criteria.
“In one plant, if someone wants to come out with a brand and they have different packaging and hot-fill, cold-fill combination, we can accommodate that under one roof, and that is a rare situation,” Miller says.
Just as beverage-makers face their share of challenges to bring products to market, co-packers are tasked with their own protocols to ensure they can serve their customers’ needs.
“With the complexity of beverages — whether it’s energy drinks, whether it’s hot-filled — I think your sanitation, your quality assurance (QA) just really has to move up a few notches,” Brooklyn Bottling’s Miller says. “Adding protein, brewing teas, there are a lot of things that can happen in the process if you’re not careful every step.”
Whether it is sanitizing floors, material weighing for batching, QA for batching, or receipt printing and cross referencing, processes for co-packers are more complex and require protocols to support them, he adds. “I think that really is the crux, the complexity of ingredients, which requires a lot more sanitation and QA skills and shorter runs,” Miller explains.
But just as formulations have become more complex, so has the packaging for beverages. “The biggest change is the diverse packaging that is evolving daily,” Castle Co-Packers’ Dworkin says. “Everybody wants to look different on the shelf.”
Understanding that brand owners are competing in a crowded marketplace to attract consumers’ attention, Dworkin says the co-packer will evaluate each product/package on an individual basis. This allows the company to decide whether the concept will work within its capabilities.
DFA’s Sauber adds that as the beverage market continues to evolve, the trends and challenges that co-packers face will not be limited to the current market.
“As more trends and advances come along, you have to make a decision on what you are going to offer,” he says. “No one can offer it all. Sometimes the trends come and go so fast; it’s hard to decide if you should make an investment in it. Lead time and installation for equipment can be up to 24 months. By that time, the market can shift and you will have obsolete equipment. I feel it’s best to concentrate on what you are good at and make small changes when opportunities arise and fit within your capabilities.”