Soft Drink Industry | 2016 PLI Report by HARE Management

SOFT DRINK INDUSTRY MARKET AND PRODUCTION LINE INTELLIGENCE

EPTDA was founded as the European Power Transmission Distributors Association in 1998 in Marbella, Spain, on the initiative of a group of power transmission and motion control (PT/MC) industrialists who believed in bringing together distributors and manufacturers involved in the PT/MC business on one unique platform. It has since become the largest organisation of PT/MC distributors and manufacturers in EMEA and is one of the most powerful and respected B2B executive platforms for the industry

As part of the development of tools and resources for members, this document is designed to add value to their commercial understanding of specific markets and production line processes. This document, the first of its type produced by the association, focuses on the Soft Drink Industry.

1. Industry Overview Page 4—7

The purpose of this document is to provide distribution management and their sales forces with market and production line intelligence on the soft drink industry. This document explores trends, identifies products used in manufacturing soft drinks, clarifies key challenges and considers the opportunities and how they can be capitalised.

This section illustrates the soft drink production process and explains each stage in detail so as to provide an understanding of what production involves and where the opportunities lie. Key customer challenges, major product groups and typical maintenance projects are identified throughout the production line, as well as highlighting potential areas of product and commercial opportunity for the distributor.

c. European sales data and evolution Key demographics

is to strengthen its members in the industrial distribution channel to be successful, profitable and competitive in serving customers according to the highest standards. The association takes great pride in its values which focus on being a premier community for qualified members through open dialogue and mutual respect; acting with integrity, honesty and fairness; and ensuring continuous growth and learning.

EPTDA’sworldwide.mission

This document has been divided into three parts:

EPTDA continually strives to develop relevant tools for its members, helping them stay competitive in a constantly evolving marketplace and business environment.

This first section provides an introduction and overview to the soft drink industry and gives key background information, market intelligence and major players within the industry. It has been organised as follows:

2. Production Line Intelligence Page 8—11

3. Use of this Document Page 12—13

The opportunities within the beverage sector, both for MRO and OEM distribution are significant, a value of 250m€ has been estimated as available for distribution in the aftermarket. The final section proposes how the document could be used and provides open-ended questions that can be asked of prospective customers in order to reinforce the knowledge gained in parts one and two and to maximise the available opportunities.

e. Key producers in the global soft drink industry Major machine builders Overview of challenges Current and future market trends

Purpose of this document

Overview

b. Market size and coverage

a. Definition, segments within the industry and market share

Soft drink industry overview

The global soft drink industry was dominated by carbonated soft drinks which had an overall market size of $337.8 billion in 2013, followed by bottled water with $189.1 billion and juice with $146.2 billion.1

PART ONE

beverages Bottled teaReady-to-drinkwaterSportsandenergydrinksAsianspeciality drinks

Deﬁnition, segments within the industry and market share

The highly competitive non-alcoholic beverage industry is composed of soft drinks and hot drinks, including carbonates, juice, bottled water, ready-to-drink tea and coﬀee, Asian specialty drinks and sports and energy drinks. Soft drinks are made up of carbonated or non-carbonated water, a sweetener and ﬂavouring.

headway.Globalbeverage

The global soft drink industry had an overall market size of $840.6 billion in 2013.4 Global volumes expanded by 3.3% in 2014, meanwhile in the European Union, sales fell by 1.59% according to Unesda and have been experiencing a slow decline since 2012. 5 While the United States remains the world’s largest market for soft drinks, markets such as China, Brazil and Mexico are experiencing continued growth. The leaders in terms of volume expansion in 2014 were the Asia Pacifi c and Middle East Africa regions with up to 6.9% and 8.7% growth/expansion respectively.6

European sales data and evolution

Market size and coverage

Fruit

According to analysis done by Canadean, overall soft drink consumption was up 0.5% across Western Europe for the first half of 2015. Low inﬂation combined with low commodity prices is leaving more disposable income for the population to spend on items of their choosing, such as refreshments.8

Below is more information on sales volumes statistics represented in litre volume sales across Europe. It is important to note the beverages that are included in the following categories. Soft drinks are comprised of carbonates, still drinks, iced/ready to go coﬀee and tea, sports and energy drinks. Dilutables include syrups and fruit powders while juice is made up of 100% juice products or nectars (25 - 99% juice). Packaged water excludes bulk as well as home and oﬃce delivery sales.

The economic environment across the region has created the ideal conditions for discount retailers to ﬂourish in the market, which has created a price war in several countries across Europe. As a consequence, although soft drink volume are stable or increasing, the value of the market is not experiencing the same

However, carbonated drink sales have been on the decline since 2011, due to health concerns in developed markets regarding sugar content and artificial ﬂavouring. 3 Because of these health conscious consumers, bottled water has witnessed robust growth rates, with other categories such as sports and energy drinks and ready-to-drink coﬀee and tea trailing not too far behind.

segment market share in 20122

Ready-to-drink coCarbonatesee4% 34% 19% 19% 9% 9% 6%

Statistics indicate an evident decline in traditional soft drink categories across Western Europe in 2015, with the exception of packaged water. The still water segment is driving the growth of the market; supplemented by iced tea, iced coﬀee and energy drink volume growth as they remain in the growth stage of their lifecycles.9 In several European markets, no- and low-calorie drinks make up 30% of sales.10 Juice, nectar and still drink (JNSD)

2009 5000049500490004850048000475004700046500litresMillion 2010 2011 Year 2012 2013 2014 48856 49186 49821 49309 48563 47792 2009 545005400053500530005250052000litresMillion 2010 2011 Year 2012 2013 2014 52766 52655 53099 53409 53007 53945 2009 1000090009500105001100012000litresMillion 2010 2011 Year 2012 2013 2014 11500 11510 11347 11048 10697 10253 9930 2009 800079007800810082008500litresMillion 2010 2011 Year 2012 2013 2014 83008400 8033 8205 8419 8420 8454 8250 Soft drink sales in Europe Juice and nectar sales in Europe Packaged water sales in Europe Dilutable sales in Europe 5

categories continue to shed volume in 2015. Previously perceived as a healthier option than carbonates, the JNSD category has been receiving increased scrutiny over sugar content which has led to a decrease in sales. Despite the decline in many of the categories, the soft drink sector remains the ‘most robust West European commercial beverage sector in 2015’.11

3 Nestle SA Global

9 Asahi Breweries Ltd Japan

Millennials – individuals born between 1981 and 1996 – as well as teenagers are the key demographic groups for the soft drink industry. This demographic is due to the size of the population, which outnumbers the baby boomer generation and by 2025 will make up 75% of the global workforce.12 13 These generations make extensive use of social media and mobile devices and have notably higher product awareness in comparison with the rest of the population.14

• Elopak (Norway)

Krones

The key challenges facing the soft drink industry are growth in developed markets, capital required to enter emerging markets, changing tastes and a shift in attitude towards health.

• Tetra Pak (Sweden)

7 Red Bull GmbH Global

4 Suntory Holdings Ltd Asia

As well as these major machine builders, who often have their own aftermarket services, there are a significant number of smaller machine builders, making machines directly for the end user in this industrial sector, as well as making subassemblies for the majors.

• Heuft Systemtechnik GmbH (Germany)

Overview of challenges

These key producers represent a significant majority of the branded products. There is, in addition, between 10-15% of the market covered by independent producers, that can be found in almost every country.

6 Dr. Pepper Snapple Group Inc. Global

Krones is a packaging and bottling machine manufacturer based out of Neutraubling, Germany. They are a world’s leading manufacturer with a 2014 revenue of 2,953.4€ million. They plan, develop and manufacturer machines and complete lines for the areas of process, filling and packaging technology in the beverage industry. Krones’ product portfolio covers the majority of the soft drink production line including: containers and tanks, water treatment, syrup kitchen, sugar dissolver, thermal product treatment, product deaeration, blending and carbonating, aseptic storage and cleaning.18

• Korber Group (Germany)

• SIG Combibloc Group Ltd. (Switzerland)

10 Kirin Holdings Co Ltd. Japan & Australia

Major machine builders

• I.M.A. Industria Macchine Automatiche S.p.A. (Italy)

5 Group Danone Global

Key producers15

Sidel

RankValue Company

The soft drink industry finds itself in a complicated global environment. Volume growth has been exceptionally diﬃcult to come by in high-income developed markets, whilst in emerging markets substantial investment is required to create

KHS

• Bosch Packaging Technology (Germany)

KHS is one of the leading international suppliers of filling and packaging systems for the beverage industry, based out of Dortmund, Germany. In 2014, they had an overall revenue of 1,077€ million. They provide machinery for the entire soft drink production line in the following areas: pasteurising, water deaeration, carbonation, dosing & blending systems, filtration, concentrate handling and machine washing. KHS also has a PET product portfolio, with blowing and filling solutions, as well as long term shelf life preservation options including their Plasmax barrier coating.16

2 Pepsi Co Inc. Global

• KUKA (Germany)

• Coesia S.p.A (Italy)

• Gerhard Schubert GmbH (Germany)

Primary GeographyBusiness

8 Tingyi Holdings Corp China

• FT System (Italy)

1 The Coca-Cola Company Global

Key demographic

Sidel, headquartered in Hünenberg, Switzerland is a key player in beverage packaging systems. They were one of the first companies to introduce PET bottles to the beverage industry. Their revenue for 2014 was 1,392€ million. They oﬀer equipment in the following areas: blowing machines, filling, labelling, blowing-filling-capping systems, end of line solutions and complete lines. To accompany their machinery selection, they oﬀer services in line improvement, spare parts and logistics, line conversions and moulds, training and packaging.17

Other players in the industry:

The top ten global soft drink producers, in terms of sales value are ranked as such:

Below are the major machine builders of the soft drink industry with a brief profile on each.

a viable production and distribution infrastructure. The endless possibilities in low-income markets may seem appealing but the amount of capital needed and the fierce competition make it tough situation to tackle, as margins are likely to be hampered during the first few years.19

Current and future market trends

Similar to organic, many consumers are now demanding ‘freefrom’ products. Although, the majority of consumers don’t actually require products that are free from gluten, wheat and dairy, they want them because they perceive them as a healthier Inoption.recent

years, there has been a rise in the number of part-time vegetarians who have reduced their meat consumption because of health, sustainability and animal welfare concerns.23 This has an impact on the soft drink industry as these consumers will be looking for alternative sources of protein as well as additional sources of fruits and vegetables.

Global products that have been recently launched with an ‘organic’ claim have risen from 6.3% of new product launches in the first half of 2013 to 9.5% in the first half of 2015.22 There has been a significant increase in new product development of organic products, which indicates that organic production will be a key trend going forward.

Beverage packaging trends include options that are compact, lightweight, earth-friendly, biodegradable, personalised and reusable. As more people consume beverages on the go, consumers want packaging that is easy to hold, open, use, and reseal. Environmentally conscious consumers continue to demand recyclable packaging, while others want their packaging to be more mobile-engaging. Packaging manufacturers continue to investigate innovative solutions to resolve these issues. Brand owners are considering bluetooth low-energy as a primary engagement technology. Another trend that is on the rise and beginning to capture brand – owners’ attention is digital package printing. Many companies see the potential advantages this type of printing can have, such as limited editions, personalisation and speed-to market.28 29

Additionallyever.

There are several identifiable trends in the food and soft drink industry; one of the most prevalent is the clean-eating trend, which applies to drinks as well. ‘Free from’, vegetarian and organic options have witnessed tremendous growth.

12%0%2%4%6%8% Organic 10%14% Vegetarian Gluten-free 6.3% 9.5% 7.8% 10.5% 7.9% 11.8% Surge in organic, vegetarian and gluten-free launch activity24 Percentage of food & beverage launches tracked- per claim (Global) H1 2013 vs. H1 2015 7

While PET bottles have seen continued growth over recent years, recording 4% CAGR (Compound Annual Growth Rate) in 2015, the global market for smart packaging technology in food and beverages is also expected to grow to $23.5 million in 2015, at an estimated CAGR of 8.2% from 2010 to 2015.26 27

Another part of the soft drink industry that is experiencing a shift in trends is packaging. Companies can chose between can, glass bottle, cartons and PET. In more recent years – active and intelligent packaging also known as smart packaging. The demand for fresh and quality packaged food and drinks is increasing and manufacturers are now concerned with longer shelf life and consumer engagement. Smart packaging is oﬀered to meet such demands, by incorporating additives and a system to monitor the condition of the packaged contents.25

At the same time, trends and consumer tastes are changing. Carbonated drinks continue to dominate the soft drink industry, driving both traﬃc and branding, but sales continue to fall year by year. Increased health awareness among consumers about the side-eﬀects of sugar and other ingredients has transformed the demand of markets as consumers now prefer more customised, unique and healthier options.

the soft drink manufacturing process presents challenges of its own; hygiene, health, and safety and energy are areas of constant focus in production. Each of these issues will be explored in detail later in this document.

Health has become the focal point of the industry. Over the last decade, healthy and functional products led the industry at a global level, with energy drinks and bottled water at the top of the ladder, expanding 9.8% and 6.1% respectively in 2014. 20 Due to the pressure from civil society groups and governments, the big players in the industry plan to ‘expand the low-calorie product portfolios, introduce smaller portion containers and educate consumers about healthier alternatives.’21 The mission for functionality, ﬂavour and healthy options has brought categories into closer competition than

• Many countries use regulations from the US Food and Drug Administration (FDA) or National Sanitation Foundation (NSF) as an international benchmark

PART TWO Soft drink production process

Energy

This schematic describes a typical soft drink production line, detailing the key stages in both the process phase (the work of preparing the product from raw ingredients) and the transmission phase (the work of packaging the liquid into individual containers ready to be shipped to customers). This production process, whilst being typical, does not represent all soft drink production as actual plant processes may vary according to the beverage being produced – such as carbonates, juice, water or energy drinks and the type of packaging – cans, bottles or PET for example. However the key stages described here will be common to most plants and it is worth noting that the transmission phase is also broadly similar in the brewery segment.

This section of the document highlights the key customer challenges in relation to process and transmission phases. It describes the key product categories used in that part of the production process and the typical projects in maintenance, repair and overhaul that are often undertaken in such a plant. This identifies the key sales opportunities in relation to products and maintenance projects that can be supported by distributors having real technical expertise.

• Significant emphasis on control of energy consumption and potential measures to reduce energy use

• Production must abide by regulations and safety policies of the country in which the production takes place

In some cases the process phase, i.e. the production of the liquid, occurs in a separate facility and then is shipped to the ‘bottler’. For such a plant, the transmission phase, will then be the only part of the production line that is relevant.

Introduction

Health and safety

• This is due to significant levels of refrigeration and heating needed in the carbonation and packaging processes

Key challenges

The following are key challenges that are constant throughout the soft drink production line and are not specific to a certain process or product group. Below the schematic, additional key challenges that appear relative to specific stages of the production process are identified.

• Carbonated soft drink production is considered one of the most energy intensive processes in the food industry

• At all times product safety must be maintained

• For aluminium can lines the output is up to 90,000 per hour

Typically the output per line by line type is as follows:

• Highest standards of hygiene must be maintained throughout production process

• For glass bottle lines the output is often 40,000 per hour, however production is being upgraded to match the output of cans at 90,000 per hour

Typical maintenance value by line type

• Aluminium can lines: 75k€ a year (in the case of pneumatics 8 - 10k€).

• Glass bottle lines: up to 100k€ a year (in the case of pneumatics 7.5 - 10k€). These lines oﬀer the highest value because of the aggressive vibration and the weight of bottles causing more wear and tear

• PET lines: up to 50k€ a year (in the case of pneumatics 10 - 12k€). These lines have a lower value due to having fewer mechanical parts, the bottle is produced by air and run in the plant on ‘air conveyors’ utilising guide rails

• For PET lines the output is 35,000 per hour

• Prevention of contaminants in products, as they can lead to illness – microbial management is crucial

• Cartons – This varies from line to line but the product output is lower than any of the forgoing because of the challenges of additional processes in the line – e.g. gluing the package

Cleanliness

Typically the value of general aftersales MRO in relation to types of line is as follows:

• Due to the pH level, high sugar level, low preservative content and production processes of soft drinks, they are highly susceptible to yeast and mould development

• Carton lines: 20k€ a year (in the case of pneumatics 2 - 4k€)

Key output production statistics

Next the clarified water is poured through a quartz sand filter to get rid of any fine particles left over. Then the water is sterilised by dosing it with a small amount of chlorine to destroy any remaining bacteria.

The water remains in a storage tank for two hours until the reaction is complete. Next, an active carbon filter dechlorinates the water and removes residual organic matter before the water is passed through a vacuum pump to undergo deaeration.

Key customer challenges

• elimination

•

Need for continuous production According to industry experts, the approximate value of aftermarket sales in the total beverage industry is: pumpwaterRaw Boosterpump sourceWater Quartzsandﬁlter Storagetank carbonActiveﬁlter Deaerationsystem Dosing waterRawtank 10

During this stage, impurities, such as suspended particles, organic matter, and bacteria are removed from the water. This is done through traditional processes such as coagulation, filtration and chlorination.

Filtration

Soft drink production line

Filtering, sterilising and dechlorinating water

• Health & safety

• Cleanliness

• Energy saving

• Vacuum

Process

Typical customer challenges across the production line – for both process and transmission elements – include:

•

Static

Clarifying the water

•

Motors

The water and syrup are carefully combined by machines called proportioners, which regulate ﬂow rates and ratios of liquids. These vessels are pressurised with carbon dioxide to prevent the liquid from becoming aerated.

These are some examples of typical projects that can be found in the process part of a soft drink production line.

Dissolved sugar and ﬂavour concentrates are pumped into the dosing station in a predetermined sequence. The ingredients are placed into batch tanks where they are carefully mixed. The syrup may be sterilised while inside the tanks, using ultraviolet radiation or ﬂash pasteurisation, which involves rapidly heating and cooling the mixture.

•

Hoses

Mixing the ingredients

Seals

Personal EquipmentProtective(PPE)

Carbonating the beverage

Filters

• Annual project to change filters on pump from the main water source. SOV: 40k€

Proportioner

Carbonationstation Batchtank 11

•

Typical process projects

•

Couplings

Key process product groups

•

• Annual renovation of 10 SOV:pumps.25k€

**Please note that all figures represent the Scale of Opportunity Value (SOV). station

Pumps

The temperature of the liquid must be carefully monitored as carbon dioxide solubility increases when the liquid temperature decreases. Most carbonators are equipped with their own cooling systems to aid the temperature control.

Deaeration Dosing

Carbonation is generally added to the finished product, though it is sometimes completed at an earlier stage.

Valves

•

Process

• Proximate value of sealing products on any SOV:line.30k€

• Replacing or upgrading the stretch cylinders on a PET blower or valves on a large filler. SOV: 50k€

Labelling is usually done by spraying the bottles with warm water and drying them. Labels are then aﬃ xed to the bottles...

Typical transmission projects

• Rebuilding the main gearbox that powers belts across the line. SOV: 20k€

Filling

Sleeve

trap Labelling machine 12

These are some examples of typical projects that can be found in the transmission part of a soft drinks production line.

Key producttransmissiongroups MechanicalMotorsChainConveyorGearboxesBearingsPneumaticsbeltsdrives Power Transmission

• Changing stainless steel ﬂat-top chain to matt-top plastic run dry chain. SOV: 50k€

• Replacing the air knives that dry the wet caps after fi tting to the bottle. SOV: 25-30k€

• Maintenance of HVAC equipment used to control atmosphere of factory. Examples include filters, motors, bearings, inverters, belts and soft starters.

Rinsing / ﬁlling / capping 3-in-1 machine Inkjet printer

Labelling

• Replacing gearboxes in the line. SOV: 50k€

Transmission

Soft drink production line

The finished product is put into bottles or cans at an extremely high ﬂow rate. Once transferred into the containers, they are immediately sealed with pressure-resistant closures, either tinplate or steel crowns with corrugates edges, twist oﬀ s, or pull tabs. When sealed, the beverages must be brought to room temperature before labelling to prevent condensation from ruining the labels.

Transmission

Palletising final process is palletising. The containers are placed into cartons or trays which are then shipped in larger pallets or crates to distributors.

The

...Most labels are made of paper although some are made from plastic film. Generally cans come pre-printed with product information prior to the filling stage. Opportunities Product group Fluid Power Bearings [not an exhaustive list] Gearboxes Belts Chain Motors Mechanical TransmissionPower(MPT) productsTypical • FRL [fi lters, regulators + lubrication] • Fittings • Tubing • Valves • Speed controllers • Actuator cylinders • resistantCorrosionactuators • Ionisers • Deep groove ball • Self bearingslubricating • bearingsHoused • unitsresistantCorrosionbearing • Angular contact ball bearings • Spur • Helical • Bevel • Spiral bevel • beltsConveyor • beltsModular • beltsTransmission • Timing belts • V belts • Roller guides • Table top • Flat top • Lube-free • guidesChain • motorsspeedVariable • DC motors • Inverters • Couples clutchingsand • Linear guides • Grease • LubricatorAutomatic • Rollers Scale valueopportunityof 30 - 50k€ 25 - 40k€ 10 - 30k€ 10 - 20k€ 10 - 15k€ 5 - 10k€ 25 - 30k€ Steam label shrink machine Shrinkpackagingwrapmachine Sleeve trap abelling machine Steam label shrink machine ShrinkpackagingwrapmachineShrinkpackagingwrapmachine teammachinelabel Shrinkpackagingwrapmachine 13

• Annual renovation of 10 pumps. SOV: 25k€ Proximate value of sealing products on any line. SOV: 30k€

Key process product groups • Pumps • Hoses • Couplings • Seals • Valves • Filters • Motors • Personal EquipmentProtective(PPE)

Clarifying the water

Filtering, sterilising and dechlorinating water

remains in a storage tank for two hours until the reaction is complete. Next, an active carbon filter dechlorinates the water and removes residual organic matter before the water is passed through a vacuum pump to undergo deaeration.

The temperature of the liquid must be carefully monitored as carbon dioxide increasessolubilitywhenthe liquid temperature decreases. Most carbonators are equipped with their own cooling systems to aid the temperature control.

• Annual project to change filters on pump from the main water source. SOV: 40k€

Process

**Please note that all figures represent the Scale of Opportunity Value (SOV). Soft drink production line - ‘Putting it all together’ According to industry experts, the approximate value of aftermarket sales in the total beverage industry is: pumpwaterRaw Boosterpump sourceWater Quartzsandﬁlter Storagetank carbonActiveﬁlter Deaerationsystem Dosing station Proportioner CarbonationstationwaterRawtank Batchtank 14

Typical process projects

•

These are some examples of typical projects that can be found in the process part of a soft drink production line.

Carbonation is generally added to the finished product, though it is sometimes completed at an earlier stage.

Key customer challenges

Typical customer challenges across the production line – for both process and transmission elements – include: • Health & safety • Cleanliness • Energy saving • Vacuum • Static elimination • Filtration • Need for productioncontinuous

Thebacteria.water

During this stage, impurities, such as suspended particles, organic matter, and bacteria are removed from the water. This is done chlorination.fisuchtraditionalthroughprocessesascoagulation,ltrationand

Carbonating the beverage

Mixing the ingredients

Typical transmission projects

Palletising

• Bearings

Labelling is usually done by spraying the bottles with warm water and drying them. Labels are then aﬃ xed to the bottles.

•

• Replacing gearboxes in the line. SOV: 50k€

Mechanical TransmissionPower

into the containers, they are immediately sealed with pressure-resistant closures, either tinplate or steel crowns with corrugates edges, twist oﬀ s, or pull tabs. When sealed, the beverages must be brought to room temperature before labelling to prevent condensation from ruining the labels.

• Pneumatics

•

• Maintenance of HVAC equipment used to control atmosphere of factory. Examples include filters, motors, bearings, inverters, belts and soft starters.

• Motors

• Changing stainless steel ﬂat-top chain to matt-top plastic run dry chain. SOV: 50k€

• Replacing the air knives that dry the wet caps after fi tting to the bottle. SOV: 25-30k€

Transmission

Labelling

The final process is palletising. The containers are placed into cartons or trays which are then shipped in larger pallets or crates to distributors.

• Rebuilding the main gearbox that powers belts across the line. SOV: 20k€

Key producttransmissiongroups

• Conveyor belts

Oncerate.transferred

Most labels are made of paper although some are made from plastic film. Generally cans come pre-printed with product information prior to the filling stage.

• Replacing or upgrading the stretch cylinders on a PET blower or valves on a large filler. SOV: 50k€

These are some examples of typical projects that can be found in the transmission part of a soft drinks production line.

Filling

Opportunities Product group Fluid Power Bearings [not an exhaustive list] Gearboxes Belts Chain Motors Mechanical TransmissionPower(MPT) productsTypical • FRL [fi lters, regulators + lubrication] • Fittings • Tubing • Valves • Speed controllers • Actuator cylinders • resistantCorrosionactuators • Ionisers • Deep groove ball • Self bearingslubricating • Housed bearings • unitsresistantCorrosionbearing • Angular contact ball bearings • Spur • Helical • Bevel • Spiral bevel • beltsConveyor • beltsModular • beltsTransmission • Timing belts • V belts • Roller guides • Table top • Flat top • Lube-free • guidesChain • motorsspeedVariable • DC motors • Inverters • Couples clutchingsand • Linear guides • Grease • LubricatorAutomatic • Rollers Scale valueopportunityof 30 - 50k€ 25 - 40k€ 10 - 30k€ 10 - 20k€ 10 - 15k€ 5 - 10k€ 25 - 30k€ Rinsing / ﬁlling / capping 3-in-1 machine Inkjet printer Sleeve trap Labelling machine Steam label shrink machine Shrinkpackagingwrapmachine 15

• Gearboxes

Chain drives

The finished product is put into bottles or cans at an extremely high ﬂow

The following provides the reader of this document, either General Management or Sales Team with some template questions to help to generate revenue from this Production Line Intelligence overview and so develop business in the Soft Drink Industry.

The Producing Company – makers of the ‘liquid’ itself [End User]

• Who is to be seen?

3. The follow up – questions to ask or to reﬂect on, at the end of the meeting or afterwards

b. The people to be seen

1. Preparing – before any visit takes place – this provides questions to think about and address before attending the company’s site. This further breaks down into two sections being:

The Manufacturing Company – makers of the installed [or to be installed] machines [OEM]

• What is the plan for follow ups to this meeting (further meeting/proposal/meeting with other people)?

There are three parts that deal with:

• What can be summarised as the main challenges they face in relation to purchasing of the types of products you can supply?

• What are the fall back objectives if the primary objectives is unachievable?

General

For many of these questions you may already know the answers. Others might be used on a regular basis when you visit customers and prospects in other industry sectors. It is meant as a resource to act as a prompt and reminder allowing your business to fully capitalise on this market intelligence and production information.

• What are the primary objectives for the meeting – what is ideally wanted to be achieved (keeping in mind that this meeting might be about preparing for a further meeting not simply to get an order this time)?

• What machines do they make?

• What kind of questions should be prepared (in relation specifically to who will be seen – [hint – check out some of the general questions below)?

The people to meet

• What should the agenda be?

• How many maintenance engineers do they have?

• How many machines do they make in a year?

• Who are their main customers?

2. The meeting – questions to ask during the meeting to understand the needs, requirements and potential sales opportunities in the prospective customer

• What is their market share in this sector?

a. Detail of the company itself

Using this document to develop business

• What do you already know about the size of the plant?

• How many other plants does this manufacturer have in your region/territory?

Preparing – before the visit

• How big is their purchasing team?

• How many people do they employ?

• How old is the plant?

• Which type of liquid production plant are you about to visit?

• What type of machine manufacturer are they?

• What is their role (plant manager/maintenance/ purchasing)?

• What do you already know about its production in terms of capacity, number of lines, output etc.?

• What kind of support material do you need to take with you?

PART THREE

• What is known about them already (hint: search LinkedIn)?

• What do you already know about the lines it has (bottle, canning, PET, carton)?

• What non-production related maintenance issues do you have to manage/deal with (e.g. in relation to HVAC)?

• What projects are being currently carried out in relation to maintenance or energy management etc?

• What are the main challenges faced in your production line?

• What type of machine is built by your company?

• What kind of support do you look for from your MRO distributor in relation to planned maintenance?

• Are there problems with the existing supply chain –speed, timeliness, quantity, quality, etc.?

• In what way can we help you with any of this?

provided?

• Are there major problems or bottlenecks in the production that you would like to speed up?

Are you using partners – suppliers or distributors – to assist you in this process?

• In what way might we help with any of this?

• What is the range of parts required?

• What level of supply is required and how does the existing supply chain work?

• What key plans, changes or adaptions are there in production that you are able to share with us?

• What are the key maintenance/industrial supplies objectives for the plant?

The actual meeting ‘The machine & sub-assembly builders – OEM’

• What were the main points you learned from the visit?

Are there projects on-going to deal with this?

• How are you going to store this information?

• Who in your business do you need to share this information with?

• How are you going to use this information?

• What are the ‘bottlenecks’ in the production process that aﬀectWhatspeed?arethey caused by?

• What are the next steps you need to take and when?

• What is the estimated annual spend on that maintenance?

• How will you complete these?

• Where is the line most prone to failure or maintenance problems?

• How many production lines are there?

The follow up

• Do you manufacture the whole machine for a bottling, canning, PET, Carton plant or do you provide specialist machines or sub-assembly for other manufacturers?

• What sort of plant is this (full source to bottle/partial/ bottling only)?

• What are your main issues in relation to maintenance?

• How will you ensure that these follow ups are completed?

• What are the issues/challenges you have with getting those parts?

• Are there specific engineering or technical solutions that a technical distributor or integrator could assist with?

• What key plans, changes or adaptions are there in production that you are able to share with us?

What type of production line are they (bottling/ canning/PET/carton)?

• What parts do you particularly utilise most on an annual basis?

• What are the next steps?

• Do you have ﬂexibility in the choice of supplier, or does the End User specify exactly?

• What do you value most in relation to a supplier like us?

The actual meeting ‘Producers of the liquid’

• What sort of regular maintenance does the plant undergo?

(If not already known any of the preparation questions above can be asked during the meeting to establish plant type, size, capacity, age, type as noted)

Are existing partners – suppliers or distributors –Howassisting?doyou want your supplier partners to assist?

• What are your main concerns in relation to type of production parts that you need to maintain and improve the line (e.g. bearings, mechanical power transmission, pneumatics, hydraulics etc.)?

• What is your biggest current problem with your MRO parts suppliers?

• What other types of follow up will you undertake and why?

• What is the opportunity in the ‘after market’ in the service

Sources: 1. Market Realist, ‘A guide to the non-alcoholic beverage industry’ 2. Bidness etc. ‘ It’s Getting Hard for the Soft Drink Industry’ 3. Market Realist, ‘Why growth is sluggish in the non-alcoholic beverage industry’ 4. Market Realist, ‘A guide to the non-alcoholic beverage industry’ 5. Unesda – Soft Drinks Europe, European Union 6. EuroMonitor Blog ‘Global Soft Drink Market Grows 3.3% as Key Markets Bounce Back’ 7. Unesda – Soft Drinks Europe, European Union 8. Just-Drinks, ‘Soft drinks grow in West Europe in 2015 but challenges remain’ 9. Ibid 10. Unesda – Soft Drinks Europe, European Union 11. Just-Drinks, ‘Soft drinks grow in West Europe in 2015 but challenges remain’ 12. United State Census Bureau, ‘Millennials Outnumber Baby Boomers and Are Far More Diverse, Census Bureau Reports’ 13. Forbes, ‘Why You Can’t Ignore Millenials’ 14. Market Realist, ‘ Understanding the soft drink industry’s key markets 15. EuroMonitor International Blog, ‘Soft Drinks: The Future of the Top Ten Companies’ 16. KHS, ‘Company’ 17. Sidel, ‘About Sidel’ 18. Krones, ‘Company’ 19. EuroMonitor International Blog, ‘Global Soft Drink Market Grows 3.3% as Key Markets Bounce Back’ 20. Ibid 21. Market Realist, ‘Soft drink industry now looking to still beverages to boost sales’ 22. PR Newswire, ‘Top Food & Beverages Trends for 2016: ‘Clean Eating’ Trend Inspires a Back to Basics Approach’ 23. Ibid 24. Innova Market Insights, 2015 25. US National Library of Medicine and National Institutes of Health, ‘ Smart packaging systems for food applications: a review’ 26. EuroMonitor Blog. ‘Asia-Pacific Consolidates its Position as Global Growth Region for PET Bottles’ 27. Markets and Markets, ‘Smart Packaging Market’ 28. Food Manufature, ‘Six top trends to drive food and drink packaging’ 29. Packaging Digest, ‘5 critical packaging trends for 2015’

The costed examples contained in this document are illustrations taken from real practice. They are, however, not predictions of future value achievable from various projects that can be undertaken in this sector. The authors, contributors and EPTDA do not accept any liability for any commercial decisions that may be taken as a result of these examples.

Acknowledgements

Acknowledgements and a sincere thank you to the following manufacturing contributors for the generosity of information and technical advice supplied: Pneumatics

Disclaimer:

SMC

Authored by:

NSK DonghuaEuropeBonfiglioliChainGroup

Also to a number of technical experts from production, maintenance and distribution companies operating in the sector who have provided the concrete examples included in the Finallytext.to the members of the ‘Know Your Market Committee’ of EPTDA who have given their advice and support throughout the process.