Current Beverage Trends You Should Know: SKU Expansion

What Is SKU Expansion?

The term ‘SKU expansion’ refers to the process of a brand adding more products, whether original, never-before-offered items, or different variations of existing products, to its beverage portfolio. The aim of SKU expansion is to offer more options to consumers, helping a brand appeal to a broader range of audiences, offer more choice and expand a brand’s market presence and market share.

For example, a drink manufacturer may jump on the latest coffee trend and create a new product that addresses this new consumer preference. The key to the SKU expansion process is innovation - beverage manufacturers need to adopt both advanced technology and out-of-the-box thinking in order to keep up.

New Formats and New Challenges

It’s important to keep in mind that the current beverage trend of SKU expansion encompasses far more than new flavor variations. Varied pack sizes, with larger and smaller cases containing different numbers of units, may mean that brands need to re-evaluate their packing and delivery strategies.

Glass bottles, plastic bottles, standard and mini sizes, boxes, cans, and pouches all require different manufacturing, as well as storage space and methods within a brand’s warehouse. SKU expansion means more than simply adding more products to a brand’s offerings - it requires an A to Z re-evaluation of everything, from how items are manufactured, to how they are shipped to retail points, to the way that they are stored.

When embracing SKU expansion, manufacturers can’t neglect the basics. Planning, including logistics, should be an essential component of your SKU expansion strategy. Beverage technology can help fill the gaps, but companies must do their due diligence to ensure that their plans aren’t overly ambitious.

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A Delicate Balance

While manufacturers will obviously welcome the uptick in sales and market share that comes along with SKU expansion, meeting consumer demand in today’s world can be extremely challenging. Brands may find themselves struggling to balance growing market needs with supply chain issues, all while maintaining product capacity.

Global events have seen significant disruptions to the supply chain, with essential ingredients and materials taking longer than ever to ship. That’s not to mention a major squeeze in the labor market, as a shortage of workers makes hiring and keeping staff difficult.

Although it may be tempting for brands to expand their SKUs as quickly and broadly as possible, having a steady supply of materials and labor at the ready is key. Manufacturers must prioritize smart expansion that happens at a sustainable pace, or risk finding themselves unable to deliver at scale.

The Impact of SKU Expansion

An increase in SKU means much more than additional products from a particular brand on a shelf, or additional options for consumers. With the need to produce more, an innovation in beverage machinery is an absolute must. An increase in SKUs requires smarter, more streamlined production processes.

That means that warehouse efficiency, from the factory floor to delivery trucks, need to be properly investigated and analyzed. Bottlers need to invest in advanced technology, especially those that leverage automation and offer hyper-accurate guidance for workers, in order to effectively manage space and production limitations.   

“We have tripled our use of robotics in the last five years along the entire line – labeling, capping, stacking and defect removal,” a senior packaging engineer at a major beverage manufacturer told Pack World.

We predict that this shift to more advanced technology and machinery in both plants and warehouses will continue as one of the current beverage trends defining the landscape for 2023.

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Leading The Way In Innovation and SKU Expansion

RC Cola has a solid legacy as a leader in innovation, having been at the forefront of emerging beverage trends since our establishment more than 100 years ago. RC Cola’s Diet Rite, originally a dietetic soda, was the first better-for-you soda option to hit the mainstream market. Diet Rite was introduced nationwide in the 1950s as a healthier alternative to full-sugar beverages, and immediately resonated with consumers. 

RC Cola Q, our fruit-focused product line, was originally launched in the 1920s under the brand name Nehi. The Q line offers classic flavors like Orange, Grape, Strawberry, Green Apple and Lemon. Leveraging shifting consumer preferences for more exotic flavors and taste combinations, RC Q now offers more funky flavors, including Kiwi Strawberry and Mango Melon.

What Other Current Beverage Trends Should I Be On The Lookout For In 2023? 

SKU expansion is far from the only beverage trend to watch out for in 2023. Download our latest eBook now to learn more about beverage marketing trends that can help you stand out from the crowd. 

As longtime beverage marketing and development experts, we’d love to guide you towards the best beverage trends to strengthen your brand. Contact us today to learn more about becoming a bottler with RC Cola, and how we can help.