Steps for entering the drinks industry with a new brand
By Richard Horwell, Brand Relations
It is undoubtedly the case that launching a new drinks business isn’t easy. However, there are many wine buffs who might like the idea of breaking into the market with an exciting, different product.
Starting a new drinks company will require that you have a POD (point of difference); something that others aren’t doing and is clearly a direction for the market. For example, there is now a trend which is very much ‘health, taste and low or no sugar’, even more so since COVID19 as everyone wants to get healthy and fight off potential viruses or illness. If you have an idea for a wine product you’ll need to think very carefully and do your research to find a potential gap in the market.
So, let’s go through the steps you need to follow before investing any money in your new drink idea.
Research your Market
We have so many clients that come to us with very little idea of the competition in the category they are planning to enter.
Don’t just look in the UK, research the rest of the world. You can learn a lot from other brands’ mistakes and get some great ideas from the flavours they have used. You can understand their messaging to their audience and how well they are selling in their market, at what retail price.
Point of Difference.
In the last 10 years there’s been A LOT of innovation in the drink’s category. So, to stand out you must have a point of difference. Why should your target audience cross the road to buy your drink rather than just accept what is on offer close by?
Many small brands dream of being so successful that they will eventually be bought by a major player. Creating a following is what makes your brand attractive for them to buy in the long term; they want your audience.
What is a point of difference? It’s not just a funky flavour or more eye-catching packaging. It is being unique. Blending ingredients that others have not thought of before and, at the end of the day, making sure it tastes great.
This isn’t a cheap industry to enter. One important issue is minimum production runs. You can develop a production recipe (as opposed to one made at home), get a brand name/branding, and then attempt to raise the money in order to pay for a production run; but it’s virtually impossible to raise money just on a basic idea.
It’s essential to have a clear financial budget, whether you’re self-funding or going to investors. The taste, the name, the branding, the distribution, the samples, the presentation pack for buyers all need to be spot-on from day one.
Developing your recipe
Making a drink at home doesn’t mean that it can be exactly replicated in mass-production. We work with recipe development experts to source the ingredients at a competitive price and ensure they work together – resulting in a drink that tastes like the one you created in your kitchen but will suit your co-packer.
Some ingredients just don’t blend. This is a very specialised area, and the recipe needs to be perfect. So, you will definitely need expert help to create an exact recipe for your contract manufacturer. And, for the packaging labels, you will need the nutritional information.
One area many entrepreneurs overlook is the regulation on Novel Foods, which applies within the UK and the EU. (See: https://ec.europa.eu/food/safety/novel_food_en)
Not all ingredients are allowed to be used in drinks and this determined by the Novel Foods regulations, so you need to be sure that all your ingredients are allowed. This will save you time in the future rectifying any obstacles you could have tackled in the initial stages.
This can make a huge difference to the overall cost of your product so you need to spend time researching suppliers, understanding the production runs etc.
Glass is currently the cheapest option, and of course is the default packaging for wine, However, generally the weight and risk of breakage can make it less popular with wholesalers and retailers.
Cans are very popular but minimum runs are high. For example, minimum runs for printed cans are 150,000 and minimum filling runs are 75,000. There are options to fill blank cans from as low as 12,000 volume and then sleeve them afterwards. It is a more expensive option but a far better way to test the market.
There are also other packaging options for drinks so understanding the best packaging for your drink and your target market is important. It’s a large part of your initial outlay so you’ll want to get it right. Also, a wrong decision could leave you with very expensive unusable product on your hands.
Co-packers (Contract Manufacturers)
Co-packers fill your drink in bulk so are a key part of the process and you need to be careful whom you choose to work with.
Although there is a lot of choice in both the UK and EU, there are several companies that care more about making money than they do about making the perfect product. Then, there are the big players that just don’t care about start-ups. Do your research and make sure that the company you select has a good reputation – maybe speak to other brands they have filled? Also make sure they have the right certification as once you start to get listings, that question will be asked by retailers and wholesalers.
If you are genuinely interested in starting a new drinks business make sure you start by doing your research. And, get expert advice as this is not a market where you’ll be able to go it alone. By following though on all the steps you’ll discover if your new brand has legs.
ABOUT THE AUTHOR
Richard Horwell is the owner of Brand Relations, a specialist food and drink marketing and branding company based in London. Over the last 10 years, Brand Relations has been behind the launch and development of over 80 brands in the UK. Richard has also built up and sold companies of his own in the Food and Beverage sector. He has over 30 years’ experience in marketing FMCG brands around the world, having lived and worked in the US, Australia and the Middle East.