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Beverage Industry: Celebrating 50 Years of Service

1940s | 1950s | 1960s | 1970s | 1980s | 1990s

"1940s: Industry in Transition."

Originally published in Beverage Industry 87, no. 6 (June 1996): 16(2).

Bottling Industry magazine hit the streets in 1946--at the height of the post-war American recovery. The magazine's mission was to report on soft drink marketing and technology. The industry has grown tremendously since then, and we've grown right along with it. Bottling Industry changed its name to Soft Drink Industry during the late 1960s. It graduated to Beverage Industry, with full beverage industry coverage, in the early 1970s. Name changes aside, we still remain committed to delivering the beverage news you need to compete in the dynamic beverage industry.

There was much to report--good and bad--during the 1940s. World War II (1940-45), the War to End all Wars, had just ended, and America was on a full-throttle push for economic recovery.

It was a period of dramatic transition as Americans ached to put the war behind them and celebrate peace.

Even with the recovery well underway, the soft drink industry continued to feel the effects of the devastating war. Inconveniences were still part of the picture, as large manufacturing during the war years was solely for the war effort. But soon more automobiles were on the road, and products were once again making their way to store shelves.

Like other American industries, the beverage industry reflected the push for economic recovery in a fervor of fresh thinking and entrepreneurial businesses.

Sugar was still under the control of the Supplies Priorities and Allocation Board and the Office of Production Management within the Office for Emergency Management, set up during World War II.

But veterans were given the unique incentive of a fifty-thousand-pound allocation of sugar for opening a bottling plant. As a result, the soft drink industry saw an unprecedented surge in the construction of plants that lasted throughout the late 1940s.

Sugar controls ended in 1947, and although meeting demand continued to be a problem, the soft drink industry was on the road to recovery.

Other woes that plagued our industry continue to crop up to this day. Long a tax target of states anxious to pay for constituent-friendly programs, the soft drink industry battled daily to keep proposals at bay. In 1947 alone, eighteen legislatures considered soft drink taxes, most using South Carolina's twenty-six-year-old tax as a model. Of the eighteen, only Pennsylvania passed a tax--of 20 percent. It was eliminated four years later, but was cited as the cause of more than $12 million in lost sales in its first year.

During the war, the soft drink industry found itself in the spotlight of bad press as an unhealthy beverage. In the late 1940s, the industry, under the leadership of the American Bottlers of Carbonated Beverages--predecessor to the National Soft Drink Association--banded together to fight it off, with campaigns that focused heavily on the purity and quality of soft drinks.

Vending took a giant leap forward in the late 1940s. Prior to the war, vending machines were considered suitable only for the work place. But during the war, 1940-45, they were added to military installations. Bottlers saw the tremendous potential for vending machines, and after the war, they started popping up at industry plants, garages, supermarkets and other retail outlets.



"The Fabulous 1950s."

Originally published in Beverage Industry 87, no. 6 (June 1996): 16(2).

Television, with its grainy picture and rabbit ears, had a greater impact on American culture during the 1950s than such newsmakers as the Cold War, rock ’n’ roll and the polio vaccine.

Not only did the new medium bring news and trends into American homes faster than any other method, its novelty had the same pull on consumers that magnets have on steel cans. It didn't take long for savvy marketers to advertise their wares over the airwaves.

As early as 1951, Coca-Cola Bottling Co. sponsored television programs, including the Bob Dixon Show and The Adventures of Kit Carson. Ocean Spray debuted its first TV commercials in 1952. And looking ahead to the next decade, Bottling Industry magazine asked its readers: "What dress will your product wear when color television is a household commodity?"

Just as the beverage industry--as well as the rest of the country--had put the hardships of World War II behind it, the Korean War broke out. While the soft drink industry was better prepared for supply management, the Korean War further pinched already low sugar reserves, and aluminum supplies were depleted by 35 percent for rearmament.

On the sunny side, manufacturing was in its fresh, post-war phase, and heavy emphasis was placed on doing more, better and faster than ever to keep up with--and in many instances create--consumer demand.

By 1955, the soft drink industry was making a "socko" comeback after a few mediocre sales years. Volume nationally rose between 10 and 15 percent, compared to a loss of 0.01 percent in 1954, and a 4 percent gain in 1953. Dollar volume was up $100 million, with total dollar volume at $1.2 billion, another record.

Per capita drink consumption was approximately 163 bottles in the early part of the decade. More than twenty-eight billion bottles of soft drinks were sold in 1954.

Schools had yet to allow soft drinks, but marketers were right there when the afternoon bell rang, with premiums, samplings, soft drinks and advertising for school programs.

Supermarkets accounted for 53 percent of the nation's grocery business by the mid-1950s, replacing Mom-and-Pop stores as the dominant retail outlet. Bottled soft drinks ranked as one of the top profit producers in food stores, giving them an approximate return of 280 percent on inventory investment, better than five times as much as the average of all other items carried by grocers!

Bottlers and brewers pushed for a beverage department in all food stores. Cost-pressed operators, with an eye on the hefty return from soft drinks, gladly complied.


"Swingin' '60s."

Originally published in Beverage Industry 87, no. 6 (June 1996): 26(3).

Soft drinks were part of the major movements of the 1960s, including civil rights, Vietnam and flower children. It was also during the 1960s that what people did with their soft drink containers--as well as other refuse--started to matter.

The beverage industry was at the forefront of the crusade against litter. Keep America Beautiful Inc., a group formed by trade associations representing glass, paper and can manufacturers, and brewers, was formed in 1963. There was a lot to pick up.

One-and-a-half billion cases of soft drinks were produced in 1963, with a retail value of $2.1 billion, according to a U.S. Bureau of Census report, issued by the U.S. Department of Commerce--a gain of 41 percent over the total in the 1958 census.

In the canned soft drink field, the report listed production of 65.7 million cases for 1963--or a 10.9 percent share of the soft drink packaging market, compared to 18.6 million cases in 1958. A further breakdown showed canned dietetic products accounting for 9 million cases.

Cans were in the spotlight as much for their growing part in the soft drink industry as for new developments. Can openers started to fade from the scene in the mid-1960s with the introduction of American Can's easy-open "Touch 'n Go," ring tab, all-aluminum end can.

American Can Co. also developed a tin-free can, manufactured completely of steel. The can was first produced in 1966 for beer containers, with other beverages following.

Cans gained a foothold in vending during the 1960s. In 1963, cans accounted for only 3 percent of vending sales. By 1964 it increased to 14 percent, and in 1965, it was about 22 percent.

Low-calorie soft drinks turned the corner during the 1960s, becoming a formidable and lasting part of the category.

A survey published in Seventeen magazine indicated that low-calorie soft drinks were more popular with the country's twelve million teenage girls than coffee, tea or fruit drinks.


"Sipping in the 70s."

Originally published in Beverage Industry 87, no. 6 (June 1996): 30(3).

With avocado and harvest gold kitchens, simulated wood paneling family/"rec" rooms, Watergate and bell bottoms, it may be safe to say the 1970s wasn't the most tasteful of decades. But that doesn't include soft drinks, which Soft Drink Industry magazine indicated were well on their way to becoming America's No. 1 beverage choice.

Carbonated beverages had been No. 2 behind coffee since 1967, but were closing the gap and would be the No. 1 beverage choice by 1977. Other top beverage picks were milk, at No. 3, followed by beer, tea, juices, and distilled spirits.

It took awhile, but after the cyclamate ban of late 1969, the fizz returned to diet soft drinks by 1975, when sales had almost completely recovered to their 1969 peak.

Although aspartame--at two hundred times the sweetness of sugar--was developed by G. D. Searle during the 1970s, it was still years away from being added to soft drinks.

With cyclamates banned, saccharin remained as just about the only nonnutritive sweetener choice. Pepsi-Cola launched Pepsi-Light, which consisted of a combination of both artificial and nutritive sweeteners (with lemon), formulated according to FDA regulations governing saccharin. It was sold and advertised as a "calorie reduced" soft drink rather than a "diet" beverage. Pepsi-Light's light went out in the '80s when aspartame was approved for soft drinks.

The introduction of high fructose corn syrup (HFCS) as a sweetening agent and partial replacement for sucrose in soft drinks was the big ingredient news of 1974. The launch of HFCS was fortuitous, as it hit the market just as sugar prices eroded. Sugar was selling at roughly $37.40 per hundred weight, while HFCS sold for about $20 per hundred weight.

As if the federal government didn't have enough to worry about with Watergate during the 1970s, it set out to further muddle the American psyche by heavily scrutinizing soft drink ingredients, particularly artificial sweeteners and food colors.

Saccharin and caffeine both came under fire by the FDA, but findings proved inconclusive and threatened bans were dropped. The use of food coloring FD&C Red No. 2 was restricted in 1971 to small doses, and only when a substitute could not be found. It was banned in 1976.

As with other segments of the marketplace, the soft drink industry was hurt by the economic depression of the 1970s. Ingredient and production costs for soft drinks rose to an all-time high, and U.S. per capita consumption of soft drinks dropped off for the first time in thirteen years in 1974, though only a minuscule 0.9 percent (to 31.6 gallons per capita).

Sales of private label soft drinks peaked in 1972 but slowly drifted downward for the remainder of the decade.

National brands fought back fast and furious with value-packaging in returnable containers at or below private label price levels in non-returnable packages. Packaging innovations were also utilized by brand marketers, including one-piece aluminum cans, six- and eight-packs, twelve-pack cartons, sixteen-ounce twist cap bottles, and forty-eight- and sixty-four-ounce plastic containers.


"Energetic '80s."

Originally published in Beverage Industry 87, no. 6 (June 1996): 36(3).

Among other things, the 1980s have been described as a decade of extremes. Our politics ran the gamut from Jimmy Carter to Ronald Reagan, and the American diet could be summed up as Big Macs washed down with Diet Coke.

There's no disputing the high drama of beverages during our last full decade, as aspartame became the sweetener of choice and water became a hip-and-healthy packaged good.

The bottled water industry was considered the fastest growing facet of the beverage industry in 1980, with sales at $443 million in 1980, up 93 percent from 1976.

The soft drink industry continued to make modest gains throughout the 1980s. By 1980, per capita consumption was 39.6 gallons. The industry had a total wholesale value of $17.7 billion, on sales of more than 3.8 million cases (a 288-ounce case).

The soft drink of the decade was New Coke, Coca-Cola's attempt to stop market share erosion of its flagship brand. The new cola had a "smoother" taste and was available in most markets by May 1985. By August, sagging sales and consumer complaints were enough to convince the company to bring back original Coke, now called Coca-Cola Classic.

All soft drinks--branded and private label alike--were affected by the approval of aspartame in soft drinks.

Aspartame was approved for soft drinks in the summer of 1983. By the end of 1984, sales of the sweetener were already $585 million, and reached $800 million by the end of 1985.

Soft drink marketers were anxious to reformulate their diet offerings with the new sweetener. Monsanto gave it an extra marketing edge when it began marketing aspartame under the NutraSweet brand and created a little red swirl to identify it.

By the mid-'80s, artificial sweeteners had pushed sugar out of the limelight, lowering its share to just under 59 percent of the sweetener market. During the early '80s, sales of high fructose corn syrup grew annually by 33 percent, with total U.S. consumption estimated at 4 million tons.

Top 10 drinks in 1980

Coca-Cola 1,425 24.3%
Pepsi-Cola 1,056 18.0%
Dr Pepper 323 5.5%
Seven-Up 317 5.4%
Tab 188 3.2%
Sprite 171 2.9%
Mountain Dew 169 2.9%
Royal Crown Cola 163 2.8%
Diet Pepsi 154 2.6%
Sugar Free Dr Pepper 69.1 1.2%
Total 4035.1 68.8%


"New Age '90s."

Originally published in Beverage Industry 87, no. 6 (June 1996): 39(4).

New age beverages accurately mirror the culture in the politically correct '90s. Not only do they reflect a healthy lifestyle, they don't offend anyone. In addition to the healthful aspects, new age beverages are characterized as being relatively new to the marketplace and are free of artificial ingredients, flavors and preservatives.

Beverages fitting into the category include waters, all-natural beverages such as teas and sodas, and juice-based sparkling waters and drinks.

Sparkling juice drinks saw the most dramatic growth at the outset of the decade, with 1990 sales estimated at $115 million, led by Sundance Natural Juice Sparkler.

Other brands soon followed, and juice drinks--although now leaning heavily toward non-carbonated new product entrants--still enjoy annual growth of more than 10 percent.

Despite heavy attacks from Coca-Cola's PowerAde and Pepsi's All Sport, Quaker Oats' Gatorade brand continues to hold about 80 percent of the sports drink market.

Today's sports drinks are being further fortified with vitamins and other antioxidants in an effort to separate themselves from the salty, water-based isotonics of yesteryear.

Sales of good-for-you beverages grew at a 14.2 percent pace last year to become a $620 million business.

During the last 10 years, bottled water has averaged 13.6 percent annual growth.

This despite the recall woes experienced by Perrier in 1990. The French bottled water concern controlled 80 percent of the U.S. import business in 1989. But random sampling of Perrier in early 1990 in North Carolina turned up traces of benzene.

Perrier acted quickly, recalling its entire stock worldwide, more than 72 million bottles in the U.S. alone. But the company has never regained its dominant position in the U.S. bottled water market.

Other marketers tapped into Perrier's misfortunes, and bottled water has become one of the largest beverage battle grounds of the 1990s.


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