Where all those weird new drinks are coming from

Kenny Malone (0:01)

This is Planet Money, from NPR.

Jeff Guo (0:06)

When I was growing up in the 90s, there weren't that many choices about what to buy. Most of the time, your options were like two or three giant brands. This was the era of Nike versus Reebok, Nintendo versus Sega, Burger King versus McDonald's. Most of all, there was Coke versus Pepsi. This was the massive economic fault line, dividing the beverage aisle, dividing the nation, frankly. You either drank Coke or you drank Pepsi. Whitney Houston, she drank Coke.

Michael Jackson, on the other hand, he was Team Pepsi.

And I was thinking about the Cola Wars recently because the business of beverages just could not be more different now. We are way past the days of just Coke or Pepsi. The other day, I had my fellow Planet Money host, Kenny Malone, meet me at the supermarket. We are actually headed to my favorite part of the store. We were going on a thrilling safari through the beverage aisle.

Kenny Malone (1:15)

Listen, you can't see Jeff, but he is glowing as we turn left into this aisle.

Kenny Malone (1:20)

This is so exciting.

Jeff Guo (1:22)

Look, I've never seen this. I go to the store all the time. What is this? Sparkling tea with adaptogens.

Amazing.

Kenny Malone (1:28)

I'm sorry, adaptogens?

Jeff Guo (1:29)

I have no idea what it is, but it's probably good for you.

Kenny Malone (1:31)

Sure.

Jeff Guo (1:32)

The sheer variety of beverage choices that are now competing for our attention, it's almost incomprehensible. You know what I'm talking about. The rainbow wall of flavored seltzers, the rows of canned latte drinks next to the cans of latte-flavored energy drinks with or without extra protein, all the new sodas that supposedly help you focus or help you sleep or maybe help you go to the bathroom.

Kenny Malone (1:59)

What do you call these sodas?

Jeff Guo (2:01)

The functional sodas.

Kenny Malone (2:03)

Right. Do you call them the poopies?

Jeff Guo (2:05)

I think we're not allowed to say that, but yeah.

Kenny Malone (2:06)

There's a Spider-Man one. Really? Yeah. Spider-Man poppy.

Jeff Guo (2:10)

Not to mention all the new flavors that companies are coming out with. There's the new Dubai chocolate Pepsi, the creamy coconut Dr. Pepper, the Cosnopolitan flavored Spindrift. The thing is, growing up, we didn't have any of this, right?

Kenny Malone (2:25)

I guess not. We only had our sprites, our ginger ale. I guess you're right. Now that you mention it, why are there flavors everywhere all of a sudden?

Jeff Guo (2:33)

Yeah.

Why is this happening? Why are there so many? Why does it feel like there's a new one every single week?

Kenny Malone (2:39)

Because we buy them, because you and I are buying them.

Jeff Guo (2:41)

Yes, but it all comes from somewhere.

Kenny Malone (2:43)

Right. Do you know the answer?

Jeff Guo (2:45)

Well, that's what I went out to find out.

Kenny Malone (2:48)

Are you going to tell me?

Jeff Guo (2:50)

I'll tell you. We got to go on a journey first.

Hello and welcome to Planet Money. I'm Jeff Guo. A few months ago, I started looking into why we are seeing so many new kinds of beverages and new beverage flavors. What I found is that the economics of the beverage industry have been turned inside out. So today on the show, we are going inside Big Beverage. We're headed to a top secret laboratory to unravel the mysteries of the soda aisle. We're going to see how new flavors get created, how cutting edge bacteria are changing the game, and we ask the experts, what does Planet Money taste like?

To understand why everything is now coming up, acai, dragon fruit, sparkling, protein, probiotic, yada, yada, yada, I called up a bunch of beverage industry insiders, and one of them shared with me this kind of industry secret. You see, apparently, a lot of the drinks showing up on shelves these days can be traced back to this one company in Kentucky. They're called Flavor Man, and behind the scenes, they're the ones who have been quietly helping all these other companies come up with the new types of beverages and new beverage flavors. Recently, they agreed to let me visit their labs in Louisville.

Evan Floyd (4:17)

Good morning.

Katie Clarke (4:18)

Hey, good to see you.

Dave Defoe (4:20)

Good to see you.

Evan Floyd (4:21)

Welcome to Flavor Man.

Jeff Guo (4:23)

The food scientists at Flavor Man specialize in beverage development. Big brands like Coke and Pepsi usually have their own in-house food scientists, but basically everyone else outsources the work of designing a drink to companies like Flavor Man. So most of the work here is super, super hush-hush. They are not allowed to talk about it.