Beverage Innovation Begets Process Renovation
The first quarter of 2025 has been a busy one for beverage companies, kicking off a year in which several prognosticators expected growth and innovation for the category. Some might say, “quite busy,” with big-ticket acquisitions, facility openings and new capital spending projects announced, plus new products galore.
Just the highlights alone from the first quarter sound like a year’s worth of news — and all of it indicative of a beverage category full of opportunity, with companies shuffling their decks to take advantage of the growth areas. Of course, there have been plant closures in certain segments and reports that the younger generation of consumers isn’t drinking alcoholic beverages at the same rates that their elders do.
Companies are jumping on board to position themselves to take advantage of the rise in popularity of better-for-you and/or functional beverages. In the energy drink sector, Celsius Holdings acquired Alani Nu, while Talking Rain Beverage Co. launched its own better-for-you soda (named Popwell, see below), and PepsiCo simply decided to acquire the Poppi healthy soda brand to jump into that segment.
If you build it …
On the capital spending side of the equation, even though 2025 is expected to be a below-standard year for the top publicly traded food and beverage companies overall, investments continue to show up on the beverage side of the fence.
Anheuser-Busch, for example, has spent an average of nearly $12 million at each of six breweries in the U.S. in the last 18 months or so, while Diageo North America will go big, pouring $415 million into the construction of a new, 360,000-sq.-ft. facility in Montgomery, Ala., that is expected to open in the second half of the year. And that’s just two of the projects in the works — several new facilities have opened in the past year for companies looking to capitalize on consumer demand.
Westrock Coffee Co. (www.westrockcoffee.com), a Little Rock, Ark.-based, global provider of coffee, tea, flavors, extracts and ingredients across retail, foodservice, C-store and other channels, opened a new, 570,000-sq.-ft. processing plant in Conway, Ark., in June 2024. Westrock chief operating officer Will Ford says it is “the largest ‘roast-to-ready-to-drink’ facility in North America and was designed to scale as customer demand increases.”
Not only does the plant allow Westrock to increase production capacity and meet growing demand, but it also improves operational efficiencies by consolidating multiple stages of production — such as roasting, grinding, extraction and packaging — under one roof. According to Ford, Westrock designed and built the plant with a high level of automation, starting with two fully automated roasters featuring in-line moisture and roast color analysis capabilities, that can handle 360kg (nearly 800 lbs.) per batch.
“To optimize production, advanced lauter tun tanks were installed to efficiently route liquids through various chillers and mixers,” he says. “A large grinder was also essential for streamlined coffee processing.”
The plant is fed by 24 green coffee storage silos with a capacity exceeding 1 million lbs. And Westrock expects it will need every bit of that supply. The Conway plant currently operates at 75% capacity utilization with infrastructure for four to six additional packaging lines, Ford notes.
Cold(-crafted) call
For Talking Rain (www.talkingrain.com), best known for the Sparkling Ice brand of beverages, process innovation drives one of the key attributes for its newest line of drinks: Popwell.
Just this February, Talking Rain jumped into the better-for-you soda category with the launch of Popwell, a new line of prebiotic and immunity-support drinks. Oscar Mayorquin, chief operating officer of Talking Rain, says the company wanted to differentiate the beverages and build on prior product line innovations, so it took the step to implement a new process for the category and create the drinks through a cold-crafting process that would preserve the flavors and functionality of the Popwell beverages.
“Processing the beverage in a cold-filled environment and using preservatives from natural sources versus pasteurizing it allowed us to maintain Popwell’s original goodness and bring best in-class flavor to the prebiotic soda category,” Mayorquin explains. “We find cold-crafting to be an area with a lot of growth potential, especially for functional beverages.”
Product innovation, for most companies, begins at the R&D and product development level. In 2017, Talking Rain began using flavors and colors from natural sources, allowing it to ensure long-term shelf stability for its products.
“Our consumers are savvy about the ingredients in their beverages, and many are searching for options that support healthy lifestyles and overall wellness — while never sacrificing flavor,” Mayorquin explains. “That has really motivated us to craft better-for-you beverages that deliver bold flavors along with vitamins and antioxidants and other functional ingredients.”
In 2023, Talking Rain decided to take innovation a step further and involve more than just the R&D team. The company opened its “Innovate, Create and Enjoy” or I.C.E. Labs, playing off its flagship ICE drinks. The in-house innovation and incubation program takes beverage concepts through an iterative, small-scale test-and-learn model that works those beverages up through a system of steps, and as they perform well, they continue to grow in distribution. Popwell beverages worked its way through the I.C.E. Labs program to eventually reach its February launch.
“We manage all aspects internally, including flavor development, processing and product attribute validation,” Mayorquin says. “Our food scientists utilize our state-of-the-art laboratory, analytical equipment and pilot canning and bottling lines to bring our products to fruition while ensuring the highest quality and integrity.”
Westrock also amped up its R&D efforts with the construction and opening of its Conway plant. The facility includes a fully equipped beverage R&D lab that mirrors the company’s full-scale operations, which smooths the transition from product development to commercial production, Ford says.
“The Coffee Lab supports every stage of the process, from fresh grinding to cupping, featuring small roasters for developing unique roasting profiles, and CQI-certified Q grading capabilities for precise sensory evaluation,” he explains.
As the company grows, Westrock sees the Conway facility’s end-to-end support helping it advance responsible sourcing efforts and supply-chain transparency through digital crop-to-cup traceability capabilities. Ford adds that the company also expects to see further “wins” in the future from the innovation the entire Conway complex has implemented.
