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🦄 vol. 49
matt chats about exciting developments in the beverage industry 🍷
we hope everyone had a good (extended) long weekend! now let’s get back to regular programming.
water into wine 🍷
As for miracles in this world, turning water into wine is pretty high up there. In religious folklore, Jesus managed it at a wedding in Cana in 1563. For mere mortals, producing wine (or any beverage for that matter) involves a great deal more effort, waste and expertise (see the ~$1,5 trillion global beverage industry). But science can be almost logic-defying at times, and we may soon all be able to turn water into wine. Well, with the help of a little machine that is.
What makes up a beverage? 🍹
As far-fetched as it may seem, the majority of beverages we consume, from orange juice to an espresso martini, are actually made up of more than 90% water. The colour, taste and texture of any beverage are usually produced by compounds that only make up 3-4% of the total composition. So wine is basically water already…
What’s your point? 👉
Well, there may be a great irony in the fact that we use hundreds of litres of water to produce a few hundred millilitres of wine that is predominantly water in any case. In short, the beverage industry uses a mind-blowingly large volume of water in the production of its products. To help put it into context:
It takes 600 litres of water to make 1 bottle of wine.🍷
It takes 200 litres of water to make 1 glass of orange juice. 🍊
And if you weren’t already aware, water is in short supply. Alarmingly, the waste isn’t limited to the 400 trillion litres of water used to grow and process ingredients in the beverage industry. Over 1 trillion bottles and cans are used for packaging, and while 20% are recycled, the difference ends up in landfills. More worryingly, the beverage industry as a whole contributes to almost ~2% of global CO2 emissions, which comprises production, storage and transport.
The solution… 🕶
…is quite simple really. Molecular beverage company Cana (ring a bell?) have managed to identify and isolate the molecules that give rise to the tastes, aromas and textures of our favourite drinks. A sleek, compact, almost Apple-like body encases water (no duh), a carbonating cylinder, and a cartridge system containing universal ingredients with a nifty-screen that helps you make an infinite variety of chilled and carbonated beverages in under 30 seconds. So, instead of moving tons of water around, it’s easier to just ship the ~3% (the flavours) and add them to the water that’s already in your taps. A beverage printer if you like…
The commercial opportunity 🤑
Now the brilliance of molecular beverages isn’t limited to tree-hugging environmentalists. In fact, the development of such a technology allows producers to access the long-tail of consumers. You see, our supermarket shelves don’t have enough space to cater for everyone’s niche desires and that’s why you’ll never find a strawberry-flavoured, turmeric-infused, cold-brewed Indonesian coffee. Why? Well for one that’s weird. And two, it’s unlikely that’d be a fast mover. Historically (and at present), beverage companies have been participants in lowest common denominators. The advent of molecular beverage creation gives everyone and anyone access to a customer along the entire Gaussian curve.
Priced at $799, there are low barriers to entry for any player who wants to enter the beverage industry. Thereafter, the startup will collect a monthly fee ($49) and plans to charge the user per drink, but at 25-30% of the retail price. It may also play into the growing creator economy and rise of influencers and microbrands. Cana has spoken of partnering with creators and recommenders, who’ll concoct their own bespoke mixes and offer them to those on the platform in what looks almost indistinguishable from Netflix’s user interface. I can think of a few who would line up to try Kim K’s refreshing, low-calorie summer seltzer. Similarly, bringing creators onboard, think Mr Beast and Khaby, would drive adoption and growth, playing on the already strong community ties they bring.
The downstream effects… 🦦
…are many, and would impact almost every point along the industry’s supply chain; from production and packaging, to logistics and even the little bar in your neighbourhood.
🌾 Half of the world’s habitable land is already used for agriculture, and only 33% of that is used for crops that are consumed by humans (and not livestock). Beverage crops, those that provide a potable beverage other than water, include sorghum, maize, sugarcane, corn, coffee, tea, and agave, to name a few. Being able to molecularly imitate their tastes and textures bypasses the need for their farming. While it most certainly will place pressure on those producing solely for beverage ingredients, it may free arable land to farm crops that’ll contribute to our global calorie pool (and mitigate food shortage concerns, highlighted by the recent Russia-Ukraine conflict)
🧃 The beverage packaging industry, with a global market size last valued at around ~$123 billion, would be left reeling with increased uptake of molecular beverage innovations. While the marketing value of an eye-catching can is often foregrounded, environmental enlightenment has seen regulatory pressure already shift packaging trends. Factories will have to pivot and redirect their efforts, or face ruin. Cana, and others that may follow suit, could usher in the end of an era.
🚚 But, perhaps most glaringly, is the likely redundancy of the majority of the supply chain of the beverage industry. Gone will be the need for fleets of trucks, storage facilities and distribution players that have made themselves at home in an intricate supply chain. While there’ll likely be economic and social dislocation, it’ll remove inefficiencies and make a noticeable dent in reducing the beverage industry’s global carbon footprint.
Should Cana be able to do everything it says it can (and not follow in the footsteps of Elizabeth Holmes’ Theranos), I battle to come up with a storyline in which it doesn’t completely leapfrog the beverage industry and its current incumbents. And if this works, maybe we’ll be printing McDonald's chicken nuggets in a decade or two.
matt found this article interesting, which looks at how tiktok is eating at google’s core products
sash found this article about amazon’s latest acquisition interesting