Table of contents
- What Are the Initial Start-Up Costs for a Beverage Company?
- This is the ultimate guide to starting a beverage company, complete with a business plan.
- Getting Your Soft Drink Company Off the Ground
- How to Begin a Business in the Alcoholic Beverage Industry
If you’ve ever wanted to learn how to establish a beverage business from the comfort of your own home, this is the post for you. Because I’m going to set out the precise step-by-step approach you’ll need to follow in order to launch your own beverage company in this article.
Caution should be used, though, since creating a beverage brand is not for the faint of heart.
There are billion-dollar beverage brands in every category conceivable, from Red Bull to Coca-Cola, and they can be found everywhere. This implies that, although there is a lot of money to be gained in selling your own beverage, it is also quite competitive in this market. The product development process is certainly not without its challenges. So have a good time, but also make sure you’re prepared to go the extra mile in order to win.
Having said that, this article will assist you in demystifying the majority of the procedure.
Let’s start with the most often requested question…
What Are the Initial Start-Up Costs for a Beverage Company?
Although I hate being the bearer of bad news, it’s best if we remove the bandage now if you want to learn how to establish a beverage firm.
Businesses in the beverage industry are among of the most cash-intensive company strategies in eCommerce, particularly if you’re just getting started. In most cases, minimum orders of 100k cans of your beverage are required. This represents an expenditure of six figures, particularly when packaging and other factors are taken into consideration.
However, there is some good news.
A six-figure starting expenditure is not required at the outset of your business.
Providing you’re fine with just testing your idea while incurring some financial loss in the process, it’s feasible to significantly reduce the start-up expenses of a beverage firm significantly. I’m talking about reducing your minimums from 100k cans to a few hundred cans or even less. Although you will not be able to earn a profit since the cost of each can will easily exceed your prospective asking price, it will be sufficient to test the idea and prove its feasibility.
You may start raising money when you’ve tested your drink brand and determined that it is successful. In some circumstances, beverage brands are actually simpler to work with than items from other food and beverage categories.
So keep this in mind as we go ahead in our discussions.
This is the ultimate guide to starting a beverage company, complete with a business plan.
Because of the intriguing obstacles that the beverage sector presents, it is not possible to establish a company in the same way that other sorts of companies are. Aside from that, you’ll find yourself drowning in debt before you can say, “I declare bankruptcy!” So let’s go into the specifics of the business strategy.
Determine who the beverage is intended for.
Before you even consider spending money on a beverage, you must first determine precisely who the beverage is intended to be consumed by. Why? Because there are a plethora of various sorts of drinks available, as well as a variety of different reasons why consumers choose to purchase beverages within each category.
To put it another way, you can’t manufacture an energy drink for someone who is trying to sleep better at night.
The finest example is the beverage, Red Bull. They only offer one beverage, and they only sell it to those who participate in extreme activities. Extreme sports and Red Bull are almost synonymous at this stage in the market’s development. The trick here is to avoid just jumping into a big market without thinking about it beforehand. Even Red Bull begins with micro-niches such as speed racing to get traction.
So, who exactly are you assisting?
Crossfitters? Vegans? Students? Drinkers?
The more compact, the better.
Identify and articulate your beverage company’s unique selling proposition.
You can’t limit yourself to only the people you’re serving. Because the beverage sector is so competitive, there is a good probability that the market you choose will be just as competitive as the industry as a whole. You’ll need a unique selling proposition (USP) in order to identify a blue ocean inside the tribe you choose.
Ideally, this USP is built on a set of attributes.
Consider the following scenario: you’re marketing to Crossfitters who want to recover more quickly. As far as recuperation goes, there are many options. Before, during, and after an exercise, there are recovery periods to take advantage of. There’s also sleep to consider. Additionally, there are micronutrient inefficiencies that you may assist with.
And that’s not even taking into consideration ingredients or other distinguishing characteristics.
So you want to discuss ideas for how you can differentiate yourself as the first product of its type for the target audience you’ve chosen. No, it is not necessary to come up with some fantastic, game-changing idea. It just needs to be a little yet substantial difference-maker in order to be effective.
For example, pea protein was formerly a rare component found in just a few beverage companies.
Check out my list of the greatest digital marketing books for eCommerce for additional information on this topic.
Discover the mathematics that underpins your success.
The most common error brand owners make when learning how to start a beverage business is failing to determine what it will take to be successful. And the economics of the company is the most important component in determining this. In other words, the minimums, expenses, and margins must be met in order for your company to be profitable.
You’ll want to get these figures as soon as possible once you’ve received them.
If you’re in the beverage industry, for example, it’s vital to understand that volume is the key to success. This implies that you’ll ultimately need to discover a substantial source of money, as well as a distribution channel that can manage the amount of product you’ll be selling. As a result, retail sales are the lifeblood of the majority of beverage companies.
The most advantageous aspect of this procedure is that it provides you with a clear view.
Following that, you’ll know precisely which activities to prioritize above others in order to attain the same level of achievement that others have achieved in ten years in a fraction of the time.
Validate Your Drink Brand as Soon as Possible
While it is costly to launch a beverage brand, it is also reasonably inexpensive to test the waters. Once again, you will not make any money. In reality, you’ll lose money since you’ll be paying close to double digits for a drink that could easily be sold for a few dollars elsewhere. However, the aim is not to make a profit.
The goal is to see how well the tires grip the ground.
Do customers feel driven to purchase your goods in the first place? Do paying clients genuinely enjoy your goods once they’ve tried it out for themselves? Do people return back to buy more once they’ve purchased something? Following a thorough examination of the evidence, do you believe the notion to be viable or viable?
This will serve as a stress test to see whether or not your concept has legs.
If you don’t, you’re going to have a difficult time with the following stage. However, if you are able to demonstrate that your product concept has the true ability to grow based on customer demand, your life will become much simpler.
What is the best way to go about it? You may use a mix of Facebook advertisements, email marketing, Amazon FBA, or even content marketing.
Identify an Investor and Establish a Scale-Up Strategy
You’ve made it to the major leagues at long last.
If you’ve done everything well up to this point, you’ll have a compelling case for any investor to consider your company. However, there is a significant difficulty with this step…
You don’t want to raise an excessive amount of money.
You just want to generate enough money to cover the costs of running the company and marketing. You run the danger of diluting yourself if you don’t. The fact that you’ll feel forced to find more and more individuals to invest in will also make life far more difficult. Therefore, it is recommended to start by looking into simple sources of finance, such as friends and family members, along with any pre-sales you may be able to generate.
Then hunt for angel investors to help you out.
If everything went well, you choose a category that didn’t need the same amount of financing as others. In the worst-case situation, you’ll want to make sure that any money you receive is only for the purpose of funding the firm. As a result, all of the preceding processes were very critical.
Once you’ve received the funds, though, you may begin expanding your business by employing advertising firms and/or new personnel.
If you’re *really* ambitious, you could even try your luck on Shark Tank.
Getting Your Soft Drink Company Off the Ground
It is likely that your venture will be in the soft drink industry, and you will be in for an exciting trip. The soft drink business is the same sector that is controlled by well-known brands such as Coca-Cola and Pepsi. These are some of the most well-known and recognizable brands in the world.
So, what are your options?
Following the exact same methods as previously, but paying close attention to niches, is what you should aim to achieve. This is a market where you should consider developing a premium-priced product with a total revenue ceiling of roughly $3MM-$5MM, which is very little in the world of drinks.
And you do this by narrowing your focus until there is no clear player left in the area.
So you want to be known as the official beverage of badminton, in other words. You don’t want to be in a head-to-head competition with Red Bull.
How to Begin a Business in the Alcoholic Beverage Industry
The category of alcoholic drinks is an intriguing one. They’ve been the same from the beginning of time when humanity began keeping records. People have consumed a variety of beverages, ranging from wine to vodka and beyond.
Things, though, are changing.
In the alcoholic beverage sector, the latest tendency is to use LESS alcohol in their products. If you can take commonly used alcoholic drinks and eliminate the alcohol from them, that would be even better! At the moment, this is the beverage industry’s “blue ocean” category, meaning there is no competition.
What is causing this to happen?
The reason is that the next generation of beverage purchasers are health-conscious consumers. This refers to drinks that have extra “healthy for you components” without the addition of unnecessary fluff. The inclusion of alcohol is justified since it is not a healthy beverage and has negative side effects such as weight gain and hangovers. These are not characteristics that consumers are willing to pay for anymore.
So if you’re looking to take on this sector, this is the approach to take.