For drinks manufacturers, variety is often a growth strategy. More formats, more pack sizes, more channel-specific offers and more limited editions can all help brands stay relevant in a changing market. But when growth is harder to earn and cost pressure is harder to absorb, that same variety can become a hidden margin drain.
Individually, these decisions often make commercial sense. Collectively, they can create a level of complexity that quietly erodes margin.
At Argon & Co, we see this becoming a critical performance challenge for businesses. Our Operations Outlook 2026 highlights the scale of the pressure facing food and beverage businesses: rising operating costs, volatile inputs, shorter product lifecycles and higher inventory risk. With 56% of food and beverage leaders optimising inventory to help manage costs, the message is clear: operational complexity has become one of the sector’s most important levers for protecting performance.
For drinks businesses, that complexity often appears in the operational detail: shorter production runs, more changeovers, duplicated packaging formats, higher inventories, slower planning cycles, increased obsolescence and more complex supplier and logistics networks. These costs are not always visible in a traditional product P&L, but they are very real.
The answer is not simply to cut the range. In a competitive market, blunt SKU rationalisation can damage growth, weaken customer relationships and reduce consumer relevance. The opportunity is more nuanced: simplify where complexity does not create value, and protect variety where it does.
That means understanding the true cost-to-serve across products, formats, channels and customers. It means identifying where multiple pack types, low-volume variants or bespoke customer requirements are creating disproportionate operational drag. It also means reassessing production run strategies, planning parameters, inventory policies, make-versus-buy decisions and the role of co-manufacturing in creating flexibility without permanently embedding cost.
Done well, simplification can strengthen a portfolio rather than shrink it. Standardising secondary packaging, aligning formats across brands, segmenting SKUs by demand profile, or moving selected low-volume products to more flexible manufacturing routes can release capacity, improve service and reduce working capital while preserving the consumer offer.
For leaders, the question is no longer only, “What should we sell?” It is also, “What complexity are we asking the business to carry, and is it worth it?”
Argon & Co works with drinks and consumer goods businesses to connect commercial strategy with operational reality. By combining expertise in portfolio analysis, manufacturing performance, supply chain planning, procurement and operating model design, Argon & Co helps organisations identify where complexity creates value, where it destroys value, and how to turn simplification into measurable improvement.
Argon & Co is a Gold Partner of the Drinks Association.