SIC 2086 Bottled and Canned Soft Drinks and Carbonated Waters

Encyclopedia of American Industries | 2005 | Copyright

SIC 2086
BOTTLED AND CANNED SOFT DRINKS AND CARBONATED WATERS

This category includes establishments primarily engaged in manufacturing soft drinks and carbonated waters. Establishments primarily engaged in manufacturing fruit and vegetable juices are classified in various canned, frozen, and preserved food classifications. Those manufacturing fruit syrups for flavoring are classified in SIC 2087: Flavoring Extracts and Flavoring Syrups, Not Elsewhere Classified ; those manufacturing nonalcoholic cider are classified in SIC 2099: Food Preparations, Not Elsewhere Classified. Establishments primarily engaged in bottling natural water are classified in SIC 5149: Groceries and Related Products, Not Elsewhere Classified.

NAICS Code(s)

312111 (Soft Drink Manufacturing)

312112 (Bottled Water Manufacturing)

Industry Snapshot

Soft drinks have become intrinsically tied to the "American way of life," and the leading soft drink, Coca-Cola, is a virtual icon of American culture. Close to 500 soft drinks manufacturers and bottling companies operate in the United States. Americans consume more soft drinks than any other beverage—more than twice the second beverage, coffee. In recent years, soft drinks accounted for more than 29 percent of American beverage consumption. The U.S. market included nearly 450 different soft drinks.

Soft drinks is a $61 billion a year industry. Coca-Cola and Pepsi-Cola controlled more than 70 percent of the U.S. soft drink market, producing the majority of the industry's best-selling brands. Approximately 500 bottlers operate across the United States. Modern bottling plants produce more than 2,000 soft drinks per minute on each line of operation.

There is more to America's soft drink industry than just the companies that provide consumers with their favorite refreshments, according to the National Soft Drinks Association (NSDA). It is also a big part of the U.S. economy, buying products and services from many different industries, creating thousands of jobs, and contributing to worthwhile causes in local communities.

Soft drink flavorings are the number one product purchased, followed by metal cans and plastics used for packaging. The soft drink industry also is a big buyer of corn syrup, advertising services, glass containers, boxes for shipping bottle caps, warehousing, fruits and vegetables, motor freight, carbonated water, sugar, and many other products and services that contribute to the manufacture of soft drinks.

Organization and Structure

Soft drink companies manufacture and sell beverage syrups and bases to bottling operations that add sweeteners and/or carbonated water to produce the final product. Independent bottlers work under contract with various soft drink manufacturers and are allotted specific territories to serve. The manufacturers provide the bottlers with syrups and bases and with a variety of business services, including product quality control, marketing, advertising, engineering, and financial and personnel training. In turn, the bottlers supply the required capital investment for land, buildings, machinery, equipment, trucks, bottles, and cases. The soft drink industry sells its product in two forms, packaged and fountain service. With fountain service, the soft drink product is dispensed and served in cups, typically in a restaurant or any location with a food service station.

Background and Development

The soft drink industry began in the mid-1880s with the creation of a syrup that was mixed with carbonated water and served at drug store lunch counters. During the early years, soft drinks were sold only in stores that could provide fountain service. Increasing distribution was tied to building additional syrup manufacturing plants.

With the advent of bottling machinery, soft drinks began to be distributed beyond the town drug store. The first merchant to bottle Coca-Cola was Joseph A. Biedenharn of Vicksburg, Mississippi, who installed a bottling machine in his candy store in 1894. The development of large-scale bottling assisted the proliferation of Coca-Cola, and by 1895 the drink was sold in nearly every part of the United States. An infrastructure of independent bottlers working under contract with Coca-Cola, producing the drink to exact specifications, and distributing it within a specific region, soon became the model distribution method for Coke and was emulated by others.

The 1960s and 1970s brought acquisitions and diversification for Coca-Cola and Pepsi-Cola. In 1960, Coke purchased Minute Maid and later acquired Duncan Foods. The Coca-Cola Company Foods Division was created in 1967 and was later renamed Coca-Cola Foods. Meanwhile, Pepsi-Cola merged with Frito-Lay in 1965, changing its name to PepsiCo but maintaining its beverage division under the name Pepsi-Cola. PepsiCo soon ventured into food service and snack foods with the acquisition of Pizza Hut, Taco Bell, and Kentucky Fried Chicken...

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