How the Beverage Industry Could Change Millennial Unemployement

Every week we're inundated with more news how the employment numbers are fluctuating, which is why we were intrigued by Mutineer Magazine's newest initiative to tackle milennial unemployment head-on. The beverage industry magazine recently announced a new Kickstarter campaign to raise money for the "Drink Careers 101" guide, in the hopes of mentoring 20-somethings on how to get jobs in the growing beverage industry. That includes jobs in the wine, beer, spirits, coffee, tea, and soda industries.

If Mutineer raises its $45,000 Kickstarter goal, the hope is to publish its in-depth career guide, as well as kick off a Drink Careers Speaking Engagement Tour for college students. We asked Alan Kropf, the president of Mutineer Magazine, some questions about the new project over email, and he shared how to land your dream job in the beverage industry.

The Daily Meal: What inspired the beginning of the Kickstarter and the Drink Careers 101 initiative?

Alan Kropf: Millennial college graduates are having an incredibly difficult time finding decent employment after leaving college. One in two recent graduates are either jobless or underemployed, and the situation is only getting worse. At the same time, the beverage industry has thrived throughout the recession and all signs point to this encouraging growth to continue. The problem is that unless you have a personal connection to the beverage industry, it's difficult to be aware of those career opportunities, and therefore difficult to academically prepare yourself to compete for those opportunities. Our printed guide, Drink Careers 101: How to Get a Job in the Beverage Industry, is going to change that, and we chose Kickstarter as our funding platform because we wanted this project to be open to the entire beverage industry to participate with.


What kind of impact do you see this having on millennials and unemployment in an ideal world?

AK: It's unrealistic to think that this will make a significant dent in the millennial unemployment crisis at the national level; however, this is an opportunity to create employment opportunities for a lot of college-educated millennials out there. We also believe this will have a hugely positive impact on the beverage industry itself. This is a win for everyone given how important the industry's overall economic impact, particularly with tax revenues, has become in recent years while other industries have struggled during the recession.

TDM: You say in your initiative, "Beverage careers represent a largely overlooked employment solution for millennial college graduates." Why do you think it’s been so ignored? Do you believe that mindset is changing, thanks to the "fine beverage" trend (craft beer, craft distilling, craft coffee, etc.)?

AK: The big reason is awareness, in that many students begin their college undergraduate studies prior to reaching the legal drinking age, so how can we reasonably expect them to be aware of careers in the beverage industry and structure their academic plan accordingly? In most cases you don't need to be 21 to enter a college enology program, you just aren't allowed to taste wine. I do think that the craft beer and craft spirits movements have laid a foundation for the beverage industry to be more relevant and relatable to millennials, now all that is missing in terms of beverage careers is the information for them to turn it into an amazing career, which is why we're doing the guide.

TDM: How long have you been in the beverage industry? And how did you get your start in the business?

AK: I've been in the beverage industry for seven years, and like many beverage professionals, I fell into it by chance. I moved from Seattle to Los Angeles in 2006 on a completely different career path, and attended bartending school so I could get a job as a bartender just to pay the bills, but I ended up really loving it. Before long I developed a fascination in wine, which inspired me to begin studying with the Court of Master Sommeliers and Wine & Spirit Education Trust, which led to prestigious sommelier jobs at the Beverly Hills Hotel and Gordon Ramsay's restaurant in West Hollywood. Those experiences set me down the path of becoming the beverage professional I am today.

TDM: If the Drink Careers 101 initiative is successful, do you think it would be expanded into bigger projects (i.e. career fairs)?

AK: Definitely. This is the first step of many to empower and inspire millennials to consider an incredible career in the beverage industry. Right now we're focused on this very important first step, but the possibilities for this project down the road are endless.

TDM: You say in the initiative that some sectors of the industry, i.e. the wine industry, has been closed off certain populations if they can’t relate to the lifestyle of "affluent Caucasians." How do you think that millennial involvement in the beverage industry will change that?

AK: It doesn't matter what race or gender you are, the beverage industry is home to some of the most amazing career paths you can imagine. The problem is that those millennials who fall outside of the traditional demographic need to be empowered. Less than 10 percent of head winemakers in California are women, and the number of African-American winemakers in the United States is alarmingly low. That said, some of the most talented winemakers today are women and African-Americans, so it's just a matter of empowering more of women and minorities to consider beverage careers.

TDM: Why is it so important to you, and the Mutineer team, to "mentor" these millennials and their career paths?

AK: It's part of our mission as a magazine, and with our resources and influence, it's just like the right thing to do. Our entire team is so passionate about this project, and we've brought together over 100 of our favorite beverage professionals to add their voice and expertise, so it's something that industry is excited and passionate about as well. With a need for an initiative like this so clearly obvious, we're just thankful we're in a position to help.

TDM: Do you have any personal advice for the young 20-something looking toward a career in the beverage industry? And if you could give your 20-something-self any advice given your career today, what would it be?

AK: There has never been a better time to pursue a career in the beverage industry than RIGHT NOW. Even if you are already in the industry, the opportunities to advance and move up are exciting as the industry expands at a fast rate. Non-traditional wine regions are popping up all over the United States. Craft beer is in the midst of a full-blown revolution, and the same goes for craft spirits. In terms of what you can do to set yourself up for success, what matters most is to take action and educate yourself. It doesn't have to cost much as that can start with books, magazine, blogs, and online videos. Find people in the industry to mentor you. Find certification and degree programs in the beverage field that inspires you. Of course, we're looking forward to providing all of this information in the Drink Careers 101 guide, but don't wait around for that to come out in the fall. The opportunities are out there right now, and it's up to you to go get them.

Production and Management of Beverages

Production and Management of Beverages, Volume One in the Science of Beverages series, introduces the broad world of beverage science, providing an overview of the emerging trends in the industry and the potential solutions to challenges such as sustainability and waste. Fundamental information on production and processing technologies, safety, quality control, and nutrition are covered for a wide range of beverage types, including both alcoholic and nonalcoholic beverages, fermented beverages, cocoa and other powder based beverages and more. This is an essential resource for food scientists, technologists, chemists, engineers, microbiologists and students entering into this field.

Production and Management of Beverages, Volume One in the Science of Beverages series, introduces the broad world of beverage science, providing an overview of the emerging trends in the industry and the potential solutions to challenges such as sustainability and waste. Fundamental information on production and processing technologies, safety, quality control, and nutrition are covered for a wide range of beverage types, including both alcoholic and nonalcoholic beverages, fermented beverages, cocoa and other powder based beverages and more. This is an essential resource for food scientists, technologists, chemists, engineers, microbiologists and students entering into this field.

What's The Future Of The Food Industry?

The Internet has revolutionized countless industries, from finance to fashion. Now it’s starting to revolutionize the food industry. The biggest change has been the ability to order online. “In 2013,” Fortune reports, “venture capitalists poured $2.8 billion into food-related startups.”

A large part of this change has been driven by millennials. An article earlier this year in Adweek described it in the following way: “It’s debatable whether millennials are special, but one thing is certain: Their relationship with food is. They want it to be authentic, they want to know how it was produced, and they want it to be a shared experience, preferably involving small plates eaten at communal tables.” McDonald's Global Chief Brand Officer, Steve Esterbrook added. "The millennial generation has a wider range of choices than any generation before them."

The newest trend is cooking convenience delivered to your door. Blue Apron is one of the biggest players. You order a dish and Blue Apron delivers all the ingredients for a fresh meal with top-quality ingredients. “Our food is a major differentiator for us,” says Blue Apron’s CEO Matt Salzberg. “We source from the same wholesale providers who supply high-end restaurants, so the quality is extremely high.”

While Blue Apron has helped define and pave this new space in the market, there are still gaps in their model. They are selling convenience. And freshness. But taste? For many of the millennials who comprise their customer base, taste is key.

Saffron Fix delivers to your doorstep all the ingredients, spices, bread and rice to cook an Indian meal at home. Saffron Fix is one of the first in the space to focus on a specific cuisine: Indian food. The project was founded by Ankita Sharma and Madhuri Sharma. Ankita just finished her MBA at NYU Stern School of Business. Prior to that she worked at Bloomberg and Apple . Madhuri complements Ankita, having gone to culinary school and previously working for the Food Network.

Saffon Fix’s specialization in Indian food will help to differentiate it. The project is still in its infancy phase, having been born earlier this year, with the help of a campaign on kickstarter. Contributors also get a box from Saffron Fix.

Recently I spoke with Ankita to learn more about their business and how they plan to compete against the bigger players in the market.

Stephanie Denning: What is your vision for Saffron Fix?

Ankita Sharma: Our motto is Indian cooking made easy.

Denning: How did you come up with the idea?

Sharma: When I came to the US, I was trying to cook an Indian dish and realized it was impossible! It was very difficult to find good naan, the rice, the spices. And it was expensive. There are Indian spices at Whole Foods now, but they can cost up to $15 just for a tiny bottle of spice. The time and cost of making this dish was ridiculous. I was thinking: it shouldn’t be that hard!

In the Indian food market, there isn’t a solution for people who want to cook Indian food at home. Saffron Fix offers accessibility. And we demystify the cuisine. I think that’s the market we’re going after. We’re taking a bite of that food market.

Denning: What convinced you it was a good idea?

Sharma: I talked with the president of Preferred Brands International, which owns Tasty Bite, Hans Taparia. Getting confirmation from him gave us confidence. He told us when he launched Indian fast food, he thought it would only be for the Indian Food market, but it turned out to be much bigger than that. There are so many ways people actually mix and match Indian food with other types of food, such as curry with chips.

Denning: Is there anyone you admire in the space?

Sharma: Blue Apron and Plated are the industry leaders and are doing it right. But there isn’t one company we want to be like. We look at all the startups coming up in the space. They all have something special that they do, and we want to take the best from each one of them. We want to make sure we deliver on the things our customers value.

Denning: What do you think of Blue Apron?

Sharma: Yes, they do certain things well, but not everything. Blue Apron is great, but they tend to have less variety and the portions are small. I tried the Masala Chickpea Stew, which is kind of like an Indian Curry, but it didn’t taste anything like it. It’s as if they stuck the word Masala in there to make it sound Indian.

Denning: What are the greatest risks you’re facing?

Sharma: It’s competition. There’s always the possibility that a newcomer enters the Indian food market quickly. Then again I don’t see that happening any time soon because most companies are focused on broad food offerings, like Blue Apron, and acquiring new cities and new states. Adding a new cuisine is not on their agenda.

Denning: What about the logistics and operations side?

Sharma: Being a small player, and dealing with big shipping companies doesn’t always give you the best deal. For example, there aren’t many shipping companies that will ship your box in one day. There are all these new small shipping companies that are trying to solve the problems that UPS and FedEx haven’t. As a small player, getting the best and getting exactly what we want is a challenge.

Denning: Do you think an MBA is helpful to start something like this?

Sharma: I couldn’t have done this without business school. It’s one thing to think of an idea. When it came to execution and refining the idea, both friends as well as professors spurred me on. I came from a tech engineering background, and just launching a business before business school just wouldn’t have been natural to me.

Denning: What do you draw from your past experiences?

Sharma: At Bloomberg, I gained an understanding of finance and how to use analytics to make business decisions. At Apple, I met such a wide range of developers, which teaches you about the kind of smart, intelligent people out there, the talent you can tap into, and how you can make a product that no one has made before.

Denning: Lessons learned over the past few months?

Sharma: The first has been the importance of marketing. Many people think just making a good product and putting it on the Internet is enough. Or just doing marketing and the rest will take care of itself. But it doesn’t. You have to be the one to give out the right information to people. And then leave it to the people to decide if they want it or not. The second is I realized logistics are pretty challenging. There are certain gaps that the industry hasn’t filled yet.

Denning: Do you think you’ll spur any copy-cats?

Sharma: Maybe Thai food, Korean, or Middle Eastern food. I feel people are getting more and more adventurous. New Yorkers have more types of cuisines in a week than people in any other state in the country. It’s pretty high for California too. People are used to eating different types of cuisines and want to cook in their home every day too.

Denning: Where do you think the food industry will go in the future?

Sharma: The food industry is all going online. Right now you have physical stores and physical restaurants. But the future of the food industry – which has been validated by the success of Blue Apron, Plated, and Fresh Direct – is online. Whether you’re buying cooked food, or whether you’re buying ingredients or recipes, people will rely less and less on physical stores, physical restaurants, frozen food, and more and more on online delivery.

The idea behind every food tech company is basically to take the food business online. There are so many startups popping up in the space. Munchery and Sprig send you pre-prepared food. Blue Apron, Plated, and Saffron Fix eliminate the grocery shopping step. None have a physical presence.

The exact model will evolve over time. And especially for the next few years, all these models will co-exist. But eventually much more food will be online.

As companies like Blue Apron and Saffron Fix vie for customers, restaurants, will have to rethink the true value they are adding for their customers.

What do successful people do when they wake up?

Unfortunately, those are habits that can get in the way of that successful future we all hope and pray for.

“You may delay, but time will not.”
-Benjamn Franklin

Here are some things successful people do when they wake up in the morning. Try these out for a few weeks and see how it makes you feel.

  • Wake up early. Time is precious. By waking up early, you give yourself enough time to plan out your day and get certain things done that you might not be able to once you actually begin your day.
  • Drink Water. Replace that coffee mug with a water jug. Research says water rehydrates your whole system, keeps you more alert and kick starts your digestive system. If you looking to lose some weight, drink a glass of hot water with lemon and your body will begin to metabolize.
  • Exercise. The earlier you exercise, the higher the chance you’ll actually do it. How many of us say we’re gonna workout but don’t actually do it. When you make it a goal to do it first thing in the morning, it becomes easier to actually accomplish the task.
  • Make your bed. I guess you can say our parents might’ve been on to something. Apparently, making your bed every morning is correlated with increased productivity. It can start a chain reaction for other healthy habits that you might be looking to start.
  • Work on a personal project. When you wake up in the morning, your mind isn’t as cluttered as it would be towards the end of your day. So why wait to work on some writing or artistic project that you have in the works? Its hard to pencil in our passions after we’ve started our day already.

Young millennials will likely bear the brunt of a slower job market

While older millennials may be more vulnerable in terms of building wealth, younger millennials, who experienced the Great Recession's recovery period and entered a better job market, would face a different set of challenges during a second recession — particularly in the job market and through income loss.

All experts I spoke with reiterated a typical effect of recessions: They tend to hit younger workers harder in the short term.

Heidi Shierholz, a senior economist and the director of policy at the Economic Policy Institute, said she anticipated a millennial age split in the job market. "The way a recession can really hurt people just starting out can have lasting effects," she said. "There's a lot of evidence that the first postgrad job you get sets the stage in some important way for later."

Millennials who are 25 and 35 are in different places in their careers, she said, as the latter is more established. "But if they don't have a job or get laid off, the hard thing about searching for a job during the downturn is that there are fewer available," Shierholz said.

And in a recession, companies might hire less than they usually do or not increase pay for employees, especially younger ones, said Winnie Sun, the managing director of Sun Group Wealth Partners.

Shierholz's and Sun's sentiments are already proving true: The economic freeze created by the coronavirus pandemic has led to a hiring freeze among many companies.

A recent study by the St. Louis Fed forecast that the wave of layoffs, if it continues unabated, could lead to 53 million Americans who want to work but are out of a job in the second quarter of 2020 — that would mean an eye-popping unemployment rate of 32%. For comparison, in 2009 at the peak of the Great Recession, unemployment rates stood at 10%.

Service-sector workers of all ages have so far borne the brunt of this economic toll, but a lower earning potential for millennials translates to less money to put aside for life goals. Sun cited the Great Recession as a prime example of the loss-of-income-to-wealth snowball effect: It caused people to rent longer and take on jobs below their education levels, thereby hampering their abilities to build wealth.

Consider Emily Baniak, 28, who entered college in 2009 with the dream of becoming an interior designer. She recalled that a professor, a former architect who had lost his job in the recent recession, told students that job security in the design industry relied solely on the economy.

Fearful that she had made an economically unsafe career choice, Baniak, upon graduation in 2013, accepted an offer to teach art at her former high school in Punta Gorda, Florida. To her, a secure job market was worth the switch — but it wasn't without its drawbacks.

"I cut my career short and took the safe route, and, unfortunately, it shows in my finances," she said. As a junior designer, she would have started out earning significantly less than she does now but would have had more opportunity for growth.

"I just received my first raise in seven years of teaching," she said. "Had I stayed in the interior-design industry, I could've potentially made up to $40,000 more per year than I do teaching."

Do Millennials Stand a Chance in the Real World?

When I was a kid, my grandmother used to spirit packets of oyster crackers from restaurants. She unwrapped gifts meticulously, peeling back the tape with her nails so that she could reuse the paper. She also stockpiled so many coupon-bought cans that she probably could have had her own show on TLC.

These habits, judging by both anecdote and literature, were generational. My grandmother was born in 1917 and entered the work force during the Great Depression. I’ve been thinking of her generation — the one that saved rather than spent, preserved rather than squandered — a lot lately. In the past year or so, data have come in regarding how my own generation, often called Generation Y, or the millennials, has adapted to our once-in-a-lifetime financial crisis — the one that battered career prospects, drove hundreds of thousands into the shelter of schools or parents’ basements and left hundreds of thousands of others in continual underemployment. And some of that early research suggests that we, too, have developed our own Depression-era fixation with money.

The millennials have developed a reputation for a certain materialism. In a Pew Research Center survey in which different generations were asked what made them unique, baby boomers responded with qualities like “work ethic” millennials offered “clothes.” But, according to new data, even though the recession is over, this generation is not looking to gorge instead, they are the kind of hungry that cannot stop thinking about food. “Call it materialism if you want,” said Neil Howe, an author of the 1991 book “Generations.” It seems more like financial melancholy. “They look at the house their parents live in and say, ‘I could work for 100 years and I couldn’t afford this place,’ ” Howe said. “If that doesn’t make you focus on money, what would? Millennials have a very conventional notion of the American dream — a spouse, a house, a kid — but it is not going to be easy for them to get those things.”

This condition is becoming particularly severe for the group that economists call younger millennials: the young adults who entered the job market in the wake of the recession, a period in which the unemployment rate among 20- to 24-year-olds reached 17 percent, when graduate school competition grew more fierce and credit standards tightened. Many also saw their parents struggle through a pay cut, a job loss or another economic disruption during the recession.

These troubles, many economists fear, left serious scars, and not just psychic ones. Now that the economy has entered a steady but slow recovery, younger millennials wonder if they can make up that gap. Lisa Kahn, a labor economist at the Yale School of Management, studied the earnings of men who left college and joined the work force during the deep recession of the early 1980s. Unsurprisingly, she found that the higher the unemployment rate upon graduation, the less graduates earned right out of school. But those workers never really caught up. “The effects were still present 15 or 20 years later,” she said. “They never made that money back.”

Kahn worries that the same pattern is repeating itself. And new research from the Urban Institute augurs that this emerging income gap is compounding into a wealth gap. The institute’s research shows that even as the country has grown richer, Generations X and Y, meaning people up to about age 40, have amassed less wealth than their parents had when they were young. The average net worth of someone 29 to 37 has fallen 21 percent since 1983 the average net worth of someone 56 to 64 has more than doubled. Thirty or 40 years from now, young millennials might face shakier retirements than their parents. For the first time in modern memory, a whole generation might not prove wealthier than the one that preceded it.

The millennials’ relationship with money seems quite simple. They do not have a lot of it, and what they do have, they seem reluctant to spend. Millennials are buying fewer cars and houses, and despite their immersion in consumer culture, particularly electronics, they are not really spending beyond their limited means. Their credit-card debt has declined, most likely because many millennials cannot get a credit card, and in part because they know they cannot afford to spend now and pay back later. “They have this risk aversion that we’ve seen with millennials since they were teenagers,” Howe said. “It’s declining alcohol use, declining drug use. I mean, declining sex.”

There might be one more factor at play in the millennials’ economic anxiety. For my grandmother’s generation, the economic boom that followed World War II expanded the middle class and its share of the nation’s wealth. Our great recession, however, came after three decades of wage stagnation for a huge swath of middle-class American workers, which is one reason income inequality has yawned to levels not seen since the late 1920s. And since the worst days of the recession ended, inequality has continued to grow. Corporations that shed workers became leaner and more profitable. Members of the 1 percent have taken nearly all the wage gains made in the recovery. Their incomes bounced back. Nearly everyone else’s fell. Worse, our savings rate before the recent crisis was near a record low.

During World War II, the ethos was “use it up, wear it out, make it do, or do without.” But the 21st-century rallying cry among the young is “We are the 99 percent.” This recession’s emphasis was never on making do with little for many millennials, it has seemed more about wondering why they had to make do with so little when so few had so much. This sentiment was captured in recent exit polls that found that nearly two-thirds of presidential voters 29 and younger thought the American economic system favored the wealthy.

The millennials, in other polls, remain optimistic about their futures. Economists are less so. There is a persistent fear that they have entered a permanently lower earnings and savings trajectory. Even if the generation recovers, even if it ends up wealthier than the one before it, the scars will be deep and long-lasting. Kahn has started comparing recent graduates during the recent recession with recent graduates in the 1981-82 recession. She said the initial wage losses were comparable, and the trend looks set to repeat. “My inclination is pessimism,” Kahn said. “If anything, these guys might experience something worse.”

Other economists also envisioned a future in which millennials would spend less and save less. “I was talking with a mom who has a son in his mid-20s and told her the generation is not on the same wealth-building path,” said Signe-Mary McKernan, one of the authors of the Urban Institute study. “She had this look of terror on her face our children are in trouble, and that’s such a worry for a parent. I told her, ‘Maybe this generation won’t have a worse life, but just a different life.’ ” And that may be true. Millennials are the best-educated generation ever. Their challenge may just be to preserve that advantage for their own children.

Why is restaurant traffic falling? Blame millennials

I hate to say this, but millennials are killing restaurants.

In particular, they are killing casual dining. The generation has been shrinking its visit frequency for the past year—far more than any other population group—and that is likely having an impact on restaurant traffic.

According to Technomic Ignite consumer data, the percentage of millennials who say they visit restaurants “more than once a week” has declined to 55% from 59% over the past year.

That might not seem like much, but no other group saw that kind of change over the same period. And millennials had the highest percentage of frequent restaurant users.

Meanwhile, the percentage of millennials who visit restaurants once a month or less increased to 8% from 6%.

“It paints a pretty stark picture when you look at it,” said Robert Byrne, senior manager of consumer insights for Technomic, a sister company of Restaurant Business. “This is supposed to be that age when they’re hitting their prime with their restaurant usage.”

Byrne noted that, if millennials are saying they’re visiting less often, the impact is likely even greater when it comes to dollars spent at the restaurants, given the size of the population.

The numbers help explain why traffic in the industry continues to fall. Traffic over the past 12 months is down 2%, according to the Technomic Chain Restaurant Index.

The problem is especially acute at casual-dining chains, where traffic is down 5.8%.

Over the past year, the percentage of millennials who are “heavy” users of casual-dining restaurants, meaning they visit once a month, has declined to 18.8% from 24.4%.

Meanwhile, the percentage of millennials who “never” visit casual-dining places has increased to 38.2% from 32.8%.

In other words, there are fewer heavy users in the country’s largest generation and more of them who say they never visit casual-dining restaurants.

“We know the advent of fast casual has changed how younger people have used restaurants,” Byrne said.

But, while consumers might not be visiting casual-dining restaurants as often, that doesn’t necessarily mean they’re replacing it with a different visit. “It could also accompany an overall decrease in restaurant usage,” Byrne said. “It’s not going to convenience stores. It’s not going to grocery stores. It’s going home.”

To be sure, millennials aren’t the only ones decreasing their visits to casual-dining restaurants.

Overall consumer visit numbers for casual dining do not look any better, according to Technomic. The overall percentage of heavy users has fallen to 13.3% from 15.8%, and the “never” users increased to 41.6% from 37.4%.

Still, the numbers for both the overall industry and for casual dining fly in the face of the state of the economy.

After all, consumer confidence is strong. Unemployment is low, and wages are rising. Yet consumers continue to tell Technomic that they are not visiting restaurants as often as they once did.

Thus, it suggests that there is only so much room in consumers' budgets, or so much time in their week, for dining out. “There is a point at which you eat X amount of meals a week,” Byrne said.

And then there’s this: What happens if the economy turns south? It’s inevitable, you know.

“What you have right now is a recipe for disaster,” Byrne said. “What if the shoe drops on the economy?”

Consumers are demanding more from their beverage experiences

From tart kombuchas to savory bone broths, shopper interest in authentic, nutritious drinks has transformed the segment.

Once viewed as an opportunity for refreshment and indulgence, the beverage category has undergone a significant transformation with a growing focus on nutrition.

In the Beverage Industry's 2018 product development outlook, 62% of U.S. consumers are seeking natural beverage options, a shift reflected in part by the soda category's continued decline and the rapid growth of organic drinks. In 2025, the segment is expected to top $55 million and grow at a compound annual growth rate of 13%, according to a report by Grand View Research.

Consumer demand for nourishing, on-the-go drink solutions shows no sign of slowing down. Manufacturers of all sizes are racing to incorporate value-adds like probiotics, functional ingredients and even animal proteins into their products.

But what sparked this change in consumer beverage expectations, and where is this evolution headed next?

"People are interested in functionality, and instead of asking ‘What’s in this bottle,’ they’re asking ‘What is this bottle doing for me?’”

Senior beverage analyst, Euromonitor International

Howard Telford, senior beverage analyst at Euromonitor International, said a convergence of consumer demand for convenience, low-sugar options and better-for-you ingredients is increasingly pushing the beverage category into the meal space.

“There’s a shift toward consumers viewing beverages as a sort of preventative nutrition occasion," Telford told Food Dive. “People are interested in functionality, and instead of asking ‘What’s in this bottle,’ they’re asking ‘What is this bottle doing for me?’”

Consumers crave all-natural drinks

All-natural offerings are the top priority for today’s health-conscious beverage buyers, Telford said. Although this term can mean something different depending on the consumer — it has yet to be regulated by the Food and Drug Administration — many shoppers associate natural products with authentic, traditional production methods.

Consumer interest in natural offerings has been compounded by the increasingly hectic pace of modern life and the instability of current politics, according to Mintel. In its 2017 trends report, the marketing research firm said “people are seeking the safety of products that are recognizable rather than revolutionary,” and that manufacturers should look to “ancient recipes, practices and traditions” as a source of innovation.

In the beverage space, this trend is reflected by the meteoric rise of kombucha, a fermented tea drink shoppers crave for its unique flavor, natural carbonation and gut-health benefits. Once found only in niche health food stores, the drink category is expected to be worth $1.8 billion by 2020.

It's no surprise that major beverage manufacturers, desperate for growth, have been eager to snap up health halo products like kombucha and drinking vinegars, pushing the natural beverage category further into the mainstream market. In 2016, PepsiCo acquired KeVita, a maker of sparkling probiotic beverages. Under the beverage giant, KeVita has expanded beyond mom-and-pop organic retailers to traditional formats like c-stores, foodservice establishments and airports.

"Health and wellness consumers are driving these products and these changes," Telford said. "They want to be healthy inside the home, during lunch occasions and commuting."

Consumers are sweet on low-sugar and no-sugar formulas

Even if the average consumer isn’t fully familiar with natural beverages like kombucha, coconut water or herbal tonics, they have made an impression on public expectations for the category.

“If you think about the millennial generation and what they were consuming as kids versus what they’re consuming now, I think in general we’re trending away from sweetened beverages as part of the daily routine," Telford said.

This change in consumer behavior is perhaps best reflected by the unexpected and widespread success of soda taxes across the nation. Only five years ago, taxes on sugary beverages were widely viewed as a failure— before the successful passage of Berkeley, California’s soda tax in 2014, similar initiatives had flopped at least 40 times. But now with eight local U.S. jurisdictions passing tax measures, researchers predict the trend will continue to gain momentum.

T elford said decades of public attention surrounding the dangers of sugar have finally sunk in, and that shoppers are becoming more interested in healthier alternatives. Consumer rejection of artificially sweetened beverages is arguably just as potent, spurred by fears over how ingredients like aspartame and Ace-K impact metabolism and other bodily functions.

“It matters to all consumers, and it’s something that’s happening in the premium tier as well as the mass tier. The consumer is looking at the labels and they want a clean label without 45 grams of sugar in the bottle,” Telford said.

The decline of soda and multi-serve fruit juices can be traced back to this changing consumer behavior. Instead of reaching for sugar-laced orange juice or soda, today’s consumer is more likely to seek a sparkling water such as La Croix. Sales of the beverage more than doubled between 2015 and 2017 to $225.5 million, driving major beverage manufacturers to play catch-up. In October, Coca-Cola bought Mexico's sparkling water brand Topo Chico for $220 million as part of CEO James Quincey's plan to become "a total beverage company."

But this growing tolerance, and even preference for less-sweet beverage formulas, doesn’t signify the death of indulgence.

“There are still stand-out brands that are purely indulgence that are doing well,” Telford said. “Mountain Dew, for example, is still successful, and Fanta had a good year. … I think indulgence is still part of our routine, but it’s not part of our daily routine, not something we’d be comfortable consuming with meals, for example, or multiple times a day.”

Telford noted the consumer's love for sugary, high-calorie coffee drinks in the foodservice space reflects this trend, and that there is a way to go before American consumers are comfortable with products that have zero sweetness.

“Is the mainstream consumer ready for a ready-to-drink matcha tea, for example, that isn’t sweetened and has sort of a grassier, earthier flavor profile?” he asked. “I think there are some manufacturers that are prepared to take that risk, and there are some that the research would tell them that, for their demographic, there’s going to need to be a certain level of sweetness.”

Blurring the lines between beverage and meal

While natural, less-sweet drink options have made serious waves in the beverage space, there is a third category that is rapidly growing.

As demand for convenience transforms the broader food industry, on-the-go consumers have begun to view beverages as an easy opportunity to get extra vitamins, fruits and vegetables and even animal protein into their diets. This demand has led to the rise of bone broth and chilled soups, which shoppers can consume as a mid-day snack or meal replacement.

The growing popularity of products such as Bonafide Provisions’s Drinkable Veggies, a line of vegetable-based beverages that combine bone broth, cold soup and HPP juices, is perhaps the best example of this shift. The company is positioning the beverage line to compete with market leaders like Campbell Soup's V8. Bonafide claims the formula’s “powerhouse combination of collagen and protein from bone broth, plus whole organic vegetables helps keep you full and satisfied without worrying about a sugar crash.”

Bonafide Provisions co-founder Alex Rains told Food Dive that she and her aunt — who are both former nutritionists — launched the company to serve consumers who were trying to get added nutrition from juice cleanses.

"Bone broth has so many applications that span so many demographics. . You can use it to upgrade the nutrient-density of your meals, to help heal your chronic issues or to support joint health and recovery."

Co-founder, Bonafide Provisions

"[We] would constantly tell our clients that we did not want them doing traditional juice cleanses because they really were not good for you . They were averaging 30 grams of sugar per bottle with no fiber of macronutrients," Rains said in an email. "We have seen a shift in consumers wanting less sugar and realizing that sugar is terrible for you. We saw a need in the juice coolers that we knew our Drinkable Veggies could fill."

Some industry observers say bone broth is another millennial-driven health fad because there is little evidence to support claims that the drink has restorative health benefits. Rains is confident the beverage will benefit medicine users, athletes, home chefs, nutrition-conscious parents and foodies. T elford believes the category has staying power because it caters to the consumer's interest in slower, authentically prepared food — without the time commitment of actually having to simmer bones, herbs and vegetables at home.

For now, it's uncertain if CPG bone broth will gain the same popularity as kombucha. In 2016, the overall category saw sales more than triple to $19.7 million, driven by interest from Whole 30 and Paleo dieters, as well as other health-conscious consumers.

"I think the authenticity, availability and versatility [of bone broth] is what encourages people to try our products," Rains said. "I think we've just scraped the top of innovation and how the space can grow."

Telford thinks there may still be a way to go before products like these become affordable and attractive enough to the average consumer.

"When we're talking about some of the really far-out there sort of products like savory vegetable drinks and bone broth, . we're talking about wellness channels, [and] premium products that carry quite a high price point and probably skew a bit younger," Telford said. "It's a distinct profile, and obviously the biggest beverage companies notice these trends, but what's the tipping point that it becomes a mainstream beverage?"

Additional Relief for the Hospitality Industry Has Arrived. Is It Enough?

Demi Elder was laid off from her job as a server at the P.J. Clarke’s in Battery Park, New York City, shortly after the restaurant shut down on March 14, 2020. Due to downsizing across P.J. Clarke’s six-restaurant group, Elder still hasn’t been invited back to work.

On March 11, 2021, President Biden signed the $1.9 trillion American Rescue Plan (ARP) stimulus bill into law. With it comes the promise of a new round of financial aid to millions of business owners and out-of-work hospitality professionals like Elder. For some, however, it all feels like too little, too late.

“I’ve seen we’re getting $1,400,” says Elder of the stimulus checks that began arriving via direct-deposit on March 13. “We really should have been getting a lot more.”

Those $1,400 stimulus checks are available to those who file their taxes as a single person and earn less than $75,000 annually. Joint-filers can expect $2,800 if they made less than $150,000 last year, and those who qualify under single or joint income thresholds can expect $1,400 per dependent.

“Things are starting to look better at least on paper for us.” —Jeremy Umansky

The ARP also allows the first $10,200 of unemployment insurance earned in 2020 to be tax free for those earning below $150,000, and “unemployment is getting a $300 boost through September, too,” says Elder of the ARP’s pledge to continue the supplementary $300 Federal Pandemic Unemployment Compensation (FPUC) payment that debuted in January until September 6, 2021.

The Pandemic Unemployment Assistance program (PUA), which provides assistance to freelancers and gig workers, will be extended until the end of August. Undocumented residents are ineligible for both these benefits, however, despite making up an estimated 10% of all U.S. service workers, according to the Pew Research Center.

Navigating the complexities of the ARP benefits is challenging. Elder says that despite the calamity of filing for unemployment she endured, she has been certifying for benefits since March 2020.

Filers who were owed but did not receive either of the first two stimulus checks in 2020 can claim the Recovery Rebate Credit, found on line 30 of the 1040 tax form. On March 13, the IRS extended the date for this year’s taxes to May 17 to allow people to adjust to these latest provisions of the ARP.

The ARP adds $7.25 billion in funding to the controversial PPP loan program, bringing to total amount $813.7 billion. / Getty

This could prove especially useful for hospitality professionals like Chottip Nimla-Or. She has been bartending at Lady Jane in Denver, Colorado since October 2020. She relocated to the area from New York City because her restaurant job there had not invited her back to work.

She now earns about one-third of what she made in Manhattan, she says. However, the majority of the ARP benefits don’t apply to her because they’re based on her 2019 tax return, when her income was significantly higher.

“The unemployment tax rate cut helps me, but I’m happy all the other things are in place to help people with their kids who need the extra support,” says Nimla-Or.

The bill also outlines a new Child Tax Credit, promising up to $3,000 per child in 2021, or up to $3,600 for a child under six years old. Qualifying means a family needs to earn under $150,000, or $112,500 for head of household. Half of this tax benefit will come as a recurring monthly check, and the other half as a return after the 2021 tax season.

“I hope this goes past the pandemic, because I think this is the kind of universal income that we need to fix the country,” says Nimla-Or. “All these parents who are struggling are working outside the home, working at home and they’re also somehow at-home teachers. It’s a lot of pressure on those people.”

Jeremy Umansky is co-owner and chef of Larder, a modern delicatessen in Cleveland, Ohio. The 30-seat restaurant did 50% of its business in takeout last year, and Umansky says he needed to make big changes to preserve the safety of his staff while doing so.

“We ended up losing three hours off each day and stopped offering Sundays,” says Umansky. “We are a small, family-owned business. We don’t necessarily have the resources to plexiglass everything out or wrap the restaurant in a bubble.”

Umansky says Larder had 10 non-management employees just prior to the pandemic. As of March 2021, Larder has six employees.

Portions of the ARP are modeled after the RESTAURANTS Act, which proposed a $120 billion restaurant relief fund. The ARP allocates $28.6 billion in relief to restaurants. Over $5 billion of that is for grants for smaller hospitality businesses whose annual revenue is under $500,000. Grants are capped at $5 million for small businesses and $10 million for restaurant groups.

For scale, U.S. restaurants reported a $240 billion loss in food sales in 2020. That comes to $20 billion a month since the start of the pandemic.

The ARP adds $7.25 billion in funding to the controversial PPP loan program, bringing to total amount $813.7 billion. On March 25, the Senate passed a bill to extend the PPP loan application period an additional 30 days, ending May 31. The Small Business Administration has reported an overwhelming backlog of applications, and so Congress will give it another 30 days after May 31 to process them.

Umansky says Larder was able to secure a PPP loan in 2020 and that was enough to help the business stay afloat, although he isn’t sure the restaurant will qualify for any further assistance from the ARP. Instead, Larder will continue to count on its community for support.

“It’s kind of like this knife edge that we are working on,” says Umansky. “Things are starting to look better at least on paper for us. And especially with the change of weather coming, more people on foot means more people coming in for us. I’m just not sure yet if on paper we’re gonna qualify.”

“I hope this goes past the pandemic, because I think this is the kind of universal income that we need to fix the country.” —Chottip Nimla-Or

Despite all the provisions for individuals and businesses alike, Elder is unconvinced this is a true rescue plan.

“I don’t think it’s enough, I think we’re just very used to accepting crumbs. That is how we end up accepting the things they do give us,” she says. “They still won’t give a $15 minimum wage. And at this point even that’s too little. [Congress] took all this time voting and deliberating. And it’s usually just against ways to make everything easier for everyone.”

The $15 federal minimum wage provision of the ARP was dropped from the bill just before its passing, despite a Reuters/Ipsos poll reporting 59% of respondents supported the proposed $15 minimum wage. A provision to end the controversial minimum tipped wage, which would have raised tipped employees minimum wage to $15 nationwide had both measures passed, also failed to make into the final version of the bill.

In January, Nimla-Or caught coronavirus when numerous members of Lady Jane’s staff contracted the virus. Once she tested negative again, she returned to work, absent her senses of taste and smell.

“We had to have our regulars at the bar help taste cocktails to make sure they tasted right,” says Nimla-Or. Several of her colleagues had also lost their senses of taste and smell.

Elder says she’s going to be fine collecting unemployment for a while longer and is looking for a new job as a sommelier. She began moving through the WSET diploma track this winter.

“I’m looking, but I’m also being safe,” she says. “Nothing has seemed worth the risk. I have a roommate who is immunocompromised now, and I just don’t want to put my life on the line.”

Supply without demand

According to McMillan, “We’re at a point of oversupply of grapes, especially in the California market.”

Over a five-year period grape prices increased and the 2018 harvest was particularly large.

The Wine Institute reported that the harvest was in line with the U.S. Department of Agriculture’s August forecast of 4.1 million tons, which is up 2% from 2017 and above the historical average of 3.9 million tons.

It’s an issue “when you don’t have the growth rate [in consumption]. Just as we need to work on the sales and marketing side of the wine business,” McMillan says, “we will need to work on collaboration in the farming side of the vineyard business, because we do need each other to be successful.”

Watch the video: Πρωταθλήτρια στην ανεργία η Ελλάδα στην ΕΕ (December 2021).