Beverage mega-mergers and food safety

June 27, 2018

The beverage industry, like much of the food industry, has seen a few large mergers in recent months.

Notable among these is the acquisition of Dr. Pepper Snapple Group by Keurig Green Mountain, forming Keurig Dr. Pepper. The melding of these giants — and others in the industry — has interesting implications for food safety, product quality, and the diversity of the food system.

Keurig was already an industry leader in the beverage industry, but with this most recent move, the company has gained a powerhouse of a global supply/distribution network. It has also added a few iconic carbonated soft drink brands, like 7 Up and Dr. Pepper.

These enormous mergers are generally good for food safety in the beverage industry — when these mergers happen, the best practices tend to continue, while the rest cease. The beverage industry is generally very safe in the first place thanks to the high-acid environment of soda and the high heat of coffee and tea, which keep drinks safe for long periods.

Advances in processing technology, like aseptic processing and advanced plant mapping with metagenomics are also making the beverages we drink today safer than ever before.

Food safety is not the only area of a beverage company that tends to improve after a large merger, however. Brand perception in the public eye can experience a boost following a large merger due to positive news reports about the companies involved.

Product consistency also usually improves, as recipes are adapted, standards adopted, and the best practices prevail. A larger company will also usually have improved leverage over a supply chain, using economies of scale and a larger pool of financial resources to pull from.

In some cases, this can have a negative impact on the product, say, if a key ingredient is hit by a drought or other natural disaster. To mitigate this risk, many large food and beverage companies are establishing small divisions within the organization that can be more agile. These agile divisions are tasked with the development of more diverse products or to drive recipe innovation. Time will tell how these strategies evolve, or if companies will decide to go in a different direction.

Category: Food Safety