Cheers! The beverage business is booming, with revenue expected to show an annual growth rate (CAGR 2025-2029) of 8.30%, resulting in a projected market volume of US$380.36bn by 2029. The U.S. hosts the projected bulk of revenue, and with brands taking products and marketing to new levels, consumers are set to stay engaged and invested.
Beverage retailers that create great products and a powerful brand can find quick success—just think about Liquid Death’s billion-dollar story. However, other retailers that identify their niche also see solid growth. And while products and marketing go far, the beverage industry (like most retail) is all about the customer experience.
The thing is, shipping beverages has unquestionably unique challenges, from product shelf life and regulations to fluctuating demand and supply chain complexities. The key to staying alive (and competitive!) for the foreseeable future is to optimize operations, particularly within fulfillment.
DTC beverage fulfillment challenges
Like any industry, beverage fulfillment has complexities that can thwart a streamlined strategy. Challenges lead to bottlenecks, lost profits, and dissatisfied customers, making it crucial to design effective operations that mitigate the risks. Beverage brands should watch out for:
Demand planning and forecasting
The beverage industry regularly has shifts in consumer preferences. Whether it’s the season, a health trend, or changing tastes, forecasting demand can be challenging.
Think about tea, for instance. It typically sells better in the winter months. But last summer, ‘sun tea’ went viral on TikTok, where creators were tapping into nostalgia and letting the sun do all the work to make tea. The results? A sudden increase in demand during the warmer months.
Beverage retailers must keep a close eye on shelf life, current industry trends, and past sales and seasonal peaks. This allows for better capacity adjustments that help optimize both production and distribution.
Supply chain issues
Storing and shipping beverages is no easy feat. From supply chain bottlenecks (no pun intended!) to a lack of inventory visibility. The most common issues include:
- Storage and handling: Many beverages require careful handling and refrigerated or temperature-controlled storage. This means it’s crucial to partner with experts in handling high-volume beverages.
- Inventory visibility: In an omnichannel world, real-time inventory data is a necessity. Without a clear picture of demand and product data, brands risk overstocking, stockouts, and fulfillment delays.
- Supply chain disruptions: If Covid and recent tariffs have taught anything, it’s that supply chains are susceptible to disruption. Beverage brands should stay abreast of manufacturing slowdowns, potential production or distribution setbacks, supplier reliability, or any economic or political event that could affect the supply chain.
- High shipping costs: The weight of beverages can easily drive up last-mile costs, especially without zone optimization or consolidation. Beverage brands should look with a partner who knows how to optimize packaging for cost-effectiveness.
- Regulatory Compliance: Many beverage brands must comply with labeling and shipping rules, as well as distributing a product with a shelf life. Navigating the evolving regulations takes careful planning and effort.
Sustainability
Younger consumers are more driven by the sustainability efforts of brands, creating a demand for more environmentally friendly packaging and sustainable fulfillment.
Nearly half of Gen Z (49%) and Millennials (47%) say they would be willing to spend more for eco-friendly packaging, followed by 41% of Gen X and 37% of Boomers. Moreover, consumers wanted minimal packaging (61%), recyclable, compostable, or reusable options (54%), reduced plastic (53%), and recycled materials (51%).
And while beverage brands must look into ways to meet customer expectations for greener packaging and fulfillment for higher customer satisfaction, additional sustainability efforts are key. More beverage brands are focusing on reducing carbon emissions in logistics, ethical ingredient sourcing, waste reduction, and using renewable energy in operations.
Why streamlined beverage fulfillment matters
The right logistics partner makes all the difference by getting drinks from point A to point B seamlessly. Beyond consumer satisfaction, optimal beverage fulfillment is essential for operational success, which includes product integrity and sustainable growth. Your beverage fulfillment partner should help facilitate:
Packaging and damage control
Beverages can break, leak, and dent, which makes packaging and damage control a critical part of preventing waste, returns, and a poor customer experience. A fulfillment partner that understands the nuances of handling beverages and using the right packaging can prevent losses that come from mishandled and unsecured products.
Scaling and expansion
When demand grows and new sales channels are added, fulfillment must scale accordingly. Leveraging an experienced tech-forward partner can help brands maintain momentum and easily handle sales surges. Growth can happen unexpectedly, making it imperative to have the right people, plans, and tech in place for a successful evolution.
B2B and retail readiness
For many brands, it’s a dream to see their beverages lining the shelves of top retailers, but B2B fulfillment brings forth a host of new complexities. It’s ideal to form partnerships with fulfillment experts who understand both B2B and DTC and can help beverage brands meet the compliance requirements and guidelines of national retailers.
Inventory management and technology
With the number of sales channels, accurate inventory data is a must. Full, real-time inventory visibility prevents stockouts, overstocking, and expiration date management. Tools like OMS and WMS offer real-time inventory insights and management, batch tracking, and order management across all channels, so you can make informed decisions and stay agile.
The perks of partnering with an experienced 3PL
Each industry has its own complexities, making the right fulfillment partner a crucial part of the overall operational puzzle. Today’s customers are not always easy to please—they want to shop across channels, they like products to arrive swiftly and undamaged, and they want plenty of options for where they buy or receive. Oh, and they want all of this to be done within an excellent customer experience.
Not to worry, though! An experienced beverage fulfillment partner offers plenty of perks, from strong regional strategies to optimal inventory management methods. With the right partner, beverage brands get:
- Faster, more reliable shipping
- Scalable operations and continued improvement
- Protected products and optimized packaging
- Cost savings in fulfillment and shipping
- Retail compliance and onboarding
- Real-time visibility across warehouses and channels
- Integrated technology
- Reduced errors and returns
- Strategic, on-demand support
Hiyo + Kase: Expanding sips with scalable fulfillment
As functional beverage brand Hiyo expanded beyond DTC into retail stores like Sprouts, Whole Foods, and Wegmans, they needed a fulfillment partner to scale with them and flex across channels.
With Kase, they found a 3PL that acts as an extension of their team, optimizing everything from small parcel orders to complex palletized shipments. The result? A 32% reduction in average fulfillment costs through optimized packaging and a 33% cut in average shipping costs per order thanks to Kase’s multi-node fulfillment strategy. Kase also enabled seamless omnichannel operations by handling retail-specific labeling, inventory batching, and on-demand staffing for promotional surges.
Kase’s fulfillment technology has given Hiyo 100% real-time inventory visibility, integrated seamlessly with Shopify, while enabling flexible order routing between warehouse nodes in California, Texas, and beyond. As the brand continues scaling both online and in stores, Kase’s open API empowers Hiyo to sync critical data across its ERP and BI tools for smarter decision-making. From launch to nationwide success, Kase has helped Hiyo not only rethink its fulfillment but deliver on its promise of a better-than-alcohol alternative, one floaty feeling at a time.
Ready to make fulfillment one less thing to stress about? Talk with a Kase beverage expert today and see how we can help you ship smarter, scale faster, and keep every can perfectly in place.
