Beverage Season 2023: Market Trends & Freight Volume Growth

Freight Volumes and Operations

The 2023 beverage season, running from mid-May to mid-July, is reportedly seeing increased freight volumes compared to previous years. According to Ronnie Davis, VP of North American Surface Transportation at C.H. Robinson, freight volumes with food and beverage customers are up about 3% year over year. Additionally, drop trailer volume in June was up 32% year-over-year, reflecting a shift back to pre-pandemic operation efficiencies.

Increased Beverage Demand and Consumption

This year's beverage season has seen a surge in demand due to increased outdoor activities such as barbecues and beach trips, leading to an overall increase in beverage consumption. Beverages such as water, sports drinks, power drinks, beer, malt beverages, hard seltzers, and hard cider are experiencing significant sales growth, with beer shipments spiking up to 50% in some regions during the summer.

Inventory Management and Market Entry

Beverage manufacturers, having to navigate through post-pandemic inventory correction - the biggest in decades - and facing product expiration dates, have used promotions and price reductions to right-size their inventory. By early spring, new beverage volume started entering the market, with one example being a beverage customer adding 1,100 more truckloads of product. Currently, several key customers have indicated they are now at normal summer inventory levels.

Future Predictions and Carrier Perspective

Looking ahead, Davis predicts beverage volumes will be slightly up, influenced by factors like extreme heat in certain states leading to increased consumption, and Canadian wildfires limiting outdoor activities in some regions. From the carrier perspective, while the U.S. trucking market overall is soft, certain markets like the Mexico border and California have seen tightening and upticks in load-to-truck ratios, respectively. However, Davis doesn't expect a significant squeeze in capacity this summer despite a record-setting influx of new carriers in the past year.

Source: Logistics Management