The future of beverage industry is online

Food and Beverages online groceriesTotal groceries sales in USA for 2013 was $600 billion worth. While online groceries market size was less than 1% which is less than $6 billion (Source Business Insider). Seems quite a small number. While in Europe at 2012 largest markets for online groceries divided accordingly: UK €7.1 billion, France €5 billion, Germany €1.1 billion and Netherlands (Source IGD).

However, things are changing dramatically at the moment in food and beverage industry. It’s being projected that at 2018 online groceries market size will increase to $18 billion. While largest European markets (UK, France, Germany, Netherlands) will double their online groceries market size to 2016 (see Table 1).

Country 2012 (EUR)      2016 (EUR)
UK 7.1 13.7
France 5.0 10.6
Germany 1.1 2.5
Netherlands       0.6 1.6

What is happening? Why we such a dramatic rise in market size all over the world? Why beverage industry is lagging to enter to the age of ecommerce? I believe there are many theories, however, main things are quite clear.

1. Cost and complexity of logistics
2. Shipping fees
3. Quality and freshness of products

Innovative startups that focus to increase the quality of online groceries shopping are being launched. For example, Instacart is promising that he will deliver your groceries in an hour. Large tech giants such as Amazon, eBay and Google are starting to offer same-day delivery services. These services are being offering only in USA, however, it doesn’t mean that Europe, Asia, Middle-East will not try to catch up. New beverage companies are being launched using funding from Crowd-Funding platforms. So what does it mean?

For beverage industry it means a lot. New opportunities are emerging both for entrepreneurs and larger beverage brands. Entrepreneurs and SMEs will be empowered to launch and test their products online while selling it directly to the consumer. They can start selling their new products in online marketplaces (Amazon, eBay) almost instantly. The age of Brand Owner -> Retailer -> Consumer is almost over. We need to adapt to the new rules of this game. It’s a unique opportunity for the whole industry. Lets’ use it!

Author - Adomas Pranevičius

Adomas Pranevicius is the co-founder and CEO of MyDrink Beverages, a premier supplier of functional ingredient solutions to beverage industry . Adomas specializes in beverage concept development, start-up beverage projects, business development and brand building. During his career he co-founded NapNock energy shot, Dragoon vitamin drink, HighVit functional vitamin drinks and Simply Umai beauty drink. He enjoys developing new beverage concepts and generating marketing ideas for them. Currently he is focusing on international expansion of MyDrink Beverages. Adomas is also writing a blog about latest beverage trends and innovations. His insights and ideas have been quoted in, Soft Drinks International, Beverage World and other media sources.