How the American Beverage Association Spends $100 Million Annually

The American  Beverage Association is a Washington, DC-based non-profit 501 (c) (6) trade association representing America’s non-alcoholic beverage industry. Originally established in 1919 as the American Bottlers of Carbonated Beverages, the organization was renamed the National Soft Drink Association in 1966, when the soft drink market began growing rapidly in the USA.

In 2004, the organization’s name was changed to the American Beverage Association (ABA), which coincidently was about the time negative press was on the upswing calling out the soft drink industry for the copious amount of sugar and high fructose corn syrup in soft drinks. In subsequent years, as the government imposed taxes on these beverages siting the lack of nutritional benefits and the great cost to the consumer and the health care industry, the ABA has fought attempts by stepping up their lobbying efforts.

Basically, the ABA is a lobbying group representing the special interests of those in the non-alcoholic beverage industry, including the companies making or bottling regular and diet sodas. It is interesting to note the chair of the ABA, Bill O’Brien  is the CEO of the Reyes Coca-Cola Bottling Company and the majority of directors are affiliated with Coca Cola, Pepsi, Dr. Pepper and Red Bull.

So, what exactly does the ABA do?  The ABA collects about $100 million ($97 million in 2022) in revenue annually which primarily comes from two sources:  “SAB assessments” and membership dues. The “SAB assessment” is the largest source of revenue ($74 million in 2022) but it is unclear where these funds come from although a guess would include the big players in the non-alcoholic beverage industry including Coca Cola, Pepsi, Dr. Pepper, and Red Bull.  Membership dues totaled $18 million in 2022.

According to the IRS Form 990 (2022) The ABA used 98% of revenue ($95 million) for 5 primary tasks:

• Pay Fees to Outside Independent Contractors – primarily consultants ($55 million or 57% of revenue)
• Pay Industry Projects ($22 million or 23% of revenue)
• Pay Staff ($14 million or 14% of revenue including $3.2 million to Katherine Lugar, the CEO)
• Pay Office-Related Costs including Travel ($2 million or 2% of revenue)
• Pay Grants ($2 million or 2% of revenue)*

“*” The ABA made 3 grants:

• $995,000 to American Beverage Foundation For A Healthy America for a child obesity prevention award and a state association grant;
• $885,000 to US Conference of Mayors for a healthy cities campaign; and
• $150,000 to Americans For Food and Beverage Choice for website expense.

As illustrated above, he ABA gave nearly $1 million to the American Beverage Foundation for a childhood obesity prevention program which given the role of sugary beverages in the obesity and health epidemic seems like a defeatist strategy.

Using the above information the ABA spent every $100 in revenue as follows:

$100:  Revenue

-$ 57:  Fees to Independent Contractors, primarily consultants

-$ 23:  Industry Projects

-$ 14:  Compensation

-$  2:  Office-related Expenses and Travel

-$  2:  Grants

-$ 98:  Total Expenses

$  2:  Unspent Revenue to General Fund (equates to about $2 million)

As of year-end 2022, the ABA had $73 million in net assets (note:  net assets would have been significant higher but the ABA reported $20 million in unrealized losses on investments.

So, the ABA is basically a trade association that spends the majority of revenue lobbying on behalf of its members.

To read the IRS Form 990 (2022), click here.