Exclusively written for overproof.com by Kristie Wright
The U.S. beverage alcohol market is worth $1.6 trillion in 2023 and is expected to grow by 5.42% every year until 2027. But the alcohol industry still faces many challenges, especially when it comes to logistics. Research, marketing, packaging, and shipping, are all key components of logistics, which is the process of organizing and carrying out an operation. In this post, we will explore five common beverage logistics challenges and how to solve them with modern solutions.
Five Common Beverage Logistics Challenges and How to Solve Them
1. Age verification
One common problem within alcoholic beverage logistics is age verification. With the rise of e-commerce storefronts in recent years, selling alcohol online has made it harder to check the age of the buyers. This can lead to legal problems, brand damage, and lost revenue. To prevent this, alcohol brands need to use reliable online age-checking methods. They can also work with logistics agencies that can help them comply with trade regulations.
2. Packaging hazards: fragility and chemical contact
Most alcohol comes in glass bottles, which can break easily during transport. Some alcohol products, like sparkling wine, need special care to avoid losing quality.
Chemical pollution is also a challenge relating to beverage logistics. Some packaging materials used for alcohol products, such as glass bottles and their enameled decorations, can contain toxic elements like lead and cadmium, which can leach into the product. Other packaging materials, such as flexitanks and plastic containers, can release residues of food contact material (FCM) or illegal additives into the alcohol, especially when exposed to temperature changes, vibrations, or spillages. These chemicals can make the product undrinkable and contribute to unnecessary waste.
To avoid these risks, alcohol brands need to use high-quality packaging, secure handling practices, and easy returns processes. They can also partner with logistics companies that specialize in alcohol distribution. Here is a list of some of the top alcohol distribution companies in the U.S.:
3. Temperature control during transportation
Temperature changes can affect the quality and shelf life of alcohol products. Transporting alcohol can create unpredictable temperature conditions. To prevent this, alcohol brands need to use tools like insulated packaging, thermal blankets, and thermal bags to keep the alcohol at a stable temperature. They also need to monitor the temperature, humidity, and gas levels during transit.
4. Compliance regulation
Maintaining compliance is a crucial aspect of beverage logistics for alcohol brands. Selling and distributing alcohol involves many rules and regulations from the TTB and the individual state governments. These rules can be complicated and change often, making it hard for alcohol brands to stay updated. To solve this, alcohol brands need to learn the codes and laws of their region and work with a regulatory and compliance agency. This type of agency can help with getting and renewing the right permits and licenses, following state and federal regulations, and meeting tax and reporting requirements.
5. Seasonality and consumer demand
Alcohol sales depend on what consumers want, which can vary from season to season. Factors like weather, holidays, and income can also affect sales. For example, when your product is not in demand, your profits can go down. But you still have to pay for things like rent, salaries and paid time off. To solve this, alcohol brands need to be flexible and fast in their supply chain. They need to be able to supply products that match consumer demand quickly and efficiently.
The beverage alcohol industry is a tough and complicated business. The logistics alone require intense strategizing, planning, and foresight. While working in the beverage alcohol industry may not always be smooth sailing, there are plenty of ways to make it work in your favor and create a system that is altogether functional, profitable, and sustainable.
Beverage Logistics FAQ
How is alcohol transported around the world?
Due to most alcoholic beverages being stored in glass or soft tin, most alcohol is transported in clean, sealed-off vehicles that are resistant to external vibrations or temperature changes.
What is the difference between logistics and transportation?
Logistics encompasses a wide variety of different operational processes, including manufacturing, storage, distribution, and transportation. Transportation refers exclusively to the process of moving products safely from one location to the next.
What type of alcohol is best-selling?
Beer is the most popular alcoholic beverage globally. But in the US, the best-selling alcoholic beverage is whiskey, with vodka taking a close second.
About the Author
Kristie Wright is an experienced freelance writer who covers topics on logistics, finance and management, mostly catering to small businesses and sole proprietors. When she’s not typing away at her keyboard, Kristie enjoys roasting her own coffee and is an avid tabletop gamer.