How Trends in the Beverage Industry Will Evolve in 2024

To kick off the new year, the food and beverage industry is reflecting on what trends shaped 2023 and what can be expected in 2024. As part of this, food and beverage businesses are asking themselves important questions to learn from the past year with the goal of positioning themselves for success in the months ahead. These questions include: How did my business fare overall? What is the current state of my beverage-grade CO2 gas supply? What are some industry best practices my business should display in 2024? 

To answer these questions, beverage gas suppliers and restaurants are examining the state of the industry and how it evolved in 2023. This past year saw steady growth as the food and beverage market grew by an annual growth rate (CAGR) of 7.3 percent due to stabilized costs. As the industry continued to navigate the post-pandemic beverage gas supply landscape, food and beverage businesses adopted new operational strategies, including the use of data and technology, and prioritized supply chain operations to continue growth and optimize operations. 

Let’s look at what worked in 2023, predicted trends for 2024, and practical ways for your food or beverage business to continue momentum in the coming years. 

Reflecting on 2023 

Throughout 2023, the food and beverage industry experienced steady growth and adopted new business practices thanks to trends geared toward optimizing gas supply and strengthening operations. Let’s discuss a few of these standout trends further. 

Sustainability Best Practices 

2023 saw the food and beverage industry begin to prioritize environmental best practices and consider its CO2 footprint. Other industries and businesses also took action with the passing of the Inflation Reduction Act (IRA), the largest federal climate policy ever. One of its goals is to lessen carbon pollution by reducing overall U.S. greenhouse gas (GHG) emissions. This legislation offers certain incentives like tax credits to ammonia and ethanol manufacturers to capture CO2 at the source and store it underground. This could potentially lead to increased costs within the CO2 supply chain and affect CO2 demand. 

Outside industries that can use alternative gasses, including nitrogen, are steering away from CO2 due to the IRA, but restaurants and beverage companies will continue using CO2, as it is the optimal gas for food storage and freezing and beverage carbonation.

Increased Use of Technology 

Relying on technology and automation was another major trend in 2023 as businesses sought ways to streamline operations and optimize supply chain processes. From packaging to maintaining quality control, facilities increased their use of robotics and automation to replace outdated technologies and address increasing customer demand. 

With access to automated technologies and beverage gas solutions, restaurant and beverage companies rely on real-time data and insights to improve gas supply ordering processes. Predictive and quick ordering are two examples where businesses can rely on data. Business owners, customers, and end-users can know how much beverage gas supply they currently have, how much they will need when reordering, and when to place orders. By planning gas supply orders with technology and automated solutions, businesses mitigate the risk of running low on gas supply and can ensure the supply chain processes are moving forward. 

Moreover, automated technology can offer more transparency into your business’s supply chain. The uncovered data is crucial for customers and consumers, as 94 percent have stated supply chain transparency and visibility lead to increased brand loyalty. 

Steady Growth in Gas Demand 

2023 saw a return to normalcy in terms of gas supply demand. Concerns surrounding CO2 shortages were lessened as supply and demand reached equal levels. Consumers made their way back into restaurants, contributing to a 13-percent increase in spending as of March 2023, as reported by the Commerce Department. Moreover, average restaurant wages steadily increased in 2023, drawing workers back and lowering the labor shortage to moderate levels. And while consumer traffic at breweries was a bit slower, the seltzer industry reached $28.4 billion in revenue.  Even with the return to normalcy, as non-atmospheric gas, CO2will always have potential for volatility.

Looking Ahead 

As experts review these top trends from the past year, they are devising how and if they will extend into 2024. 

The significant focus on sustainability will continue as more companies consider managing their carbon footprint, as discussed in a study by Finlays. Reducing your carbon emissions not only reduces your environmental impact, but also puts less stress and strain on CO2 demand. Food and beverage companies almost exclusively use CO2 gas, and there are no substitutes. Outside industries are moving away from CO2altogether (if they can) and turning to alternative gas solutions like nitrogen to lower their emissions. The less CO2 is used by non-food and beverage businesses, the more there is available for your operations. 

The market predicts steady gas demand to continue into 2024. However, as you start your 2024 planning, it is recommended to anticipate and account for increased beverage-grade gas prices. For example, a September 2023 report stated CO2 prices reached $53.03 per metric ton. Due to these price increases, it is vital to prioritize budgeting to ensure you have the right amount of CO2 for the upcoming year, even if this means doubling your initial supply order. 

An overarching theme and prediction for 2024 is proactive communication between gas suppliers and food and beverage companies. Gas suppliers are encouraged to share industry knowledge with food and beverage customers so they can stay up to date with the latest trends. Additionally, by partnering with gas suppliers, you can evaluate the right amount of beverage gas supply needed for your business. With open communication, gas suppliers and companies can work together to navigate the ever-changing industry landscape and make the necessary changes to move your business forward. Moreover, data and technology can produce actionable insights to inform your business and optimize operations.  

Improving Your Bottomline 

As we think back on 2023, we saw positive trends in maintaining gas demand, encouraging sustainable business practices, and increasing the use of technology and automation. There is an opportunity for potential growth as this momentum continues, and more businesses are adopting industry best practices like carbon emission reduction and increasing customer communication. By leaning into last year’s trends and thinking through ways to further enhance and apply these approaches to your business, you can better service your end-customers, optimize your operations, and improve your bottom line.