Negotiations Beverage Contract Manufacturers: How To Prepare For Successful

  • Home
  • /
  • Blog
  • /
  • Negotiations Beverage Contract...
  • Negotiations Beverage Contract Manufacturers: How To Prepare For Successful

    Before you enter into legal business relations, you must prepare deliberately for your negotiations. Especially when your business is B2B, and you are also working in the F&B industry, your partners are multinational owners, suppliers, and distributors worldwide. To come to a deal, your verbal skills and solving problem skills are crucial elements.

    negotiate beverage contract manufacturers techniques

    Techniques for successful negotiations

    Negotiating requires giving and taking. Ideally, a successful negotiation is where you can make concessions that mean little to you while providing something to the other party. In other words, a fruitful negotiation will result in a win-win scenario between the two parties. Preparation is the critical element of a successful negotiation, and there is no exception for the beverage industry.

    In this article, six main techniques to be well-prepared for successful negotiations among beverage contract manufacturers will be illustrated and analyzed from a beverage supplier’s perspective.

    1. Doing research

    The more manufacturers you can compare, the more likely you are to find the best match for your beverage business. Just as important as gathering the quotes and capabilities from different co-packers is comparing them in a way that helps you see all of your options.

    Sometimes, a quote that looks high may end up being the best value because of the additional services, options, or flexibility offered. Use the information you have from co-packers to project various scenarios and possibilities for logistics, labeling, and storage. You may find that a production path that looks a little different than expected also brings unanticipated advantages.

    beverage manufacturers research

    Technique 1: Doing research

    The more manufacturing companies you can compare with, the more ability you have to find your own business’s most suitable counterparts. Gathering enough quotes and capabilities from different co-packers is considered the main activity to see all your options. Subsequently, clear understandings of your partners will accelerate your successful negotiation rate.

    1. Analyzing the drink industry

    In beverage contracts, managers working in an experienced beverage manufacturer are like world-class masters when it comes to beverage deal negotiations. If you know how to arrange the opening sequence best, you’ll have a perfect sense of the next move.

    Our chances of beating the odds are not so high without knowing “what moves when” or future trendings. You are putting yourself in a dilemma.

    Analyzing the beverage industry

    Technique 6: Analysis of The Beverage Industry

    When analyzing the world’s drink industry, don’t forget to collect information from reliable websites or channels such as The Investopedia, The Economist or Bloomberg.

    To successfully negotiate in this arena, you should know how to set the opening sequence and be able to predict the moves that will follow. 

    1. Determining the objectives of both sides.

    Before entering into any B2B beverage negotiations, you necessarily have an accurate picture of your financial model. An in-depth financial analysis will help you understand what you could afford. That gives you a solid starting point for the next steps.

    Preparing your estimated cost of goods sold (COGS) and cash schedule empowers you to communicate confidently and accurately with potential contract manufacturers.

    Determining objectives of negotiation

    Technique 2: Identifying Objectives Clearly and SMARTLY

    A solid financial picture also helps you make good decisions. It will, in turn, set both you and your contract manufacturer up for long-term, sustainable success. When you are setting objectives, you should undoubtedly think about the following things:

    1. Payment terms
    2. Price
    3. Quality
    4. Delivery schedule
    5. Transport of packaging
    1. Brainstorm possibilities and trades

    Brainstorming is a quick way to evoke lots of ideas and possibilities. One of the strengths of this tool is that it stimulates creative, innovative, and unconstrained thinking. Also, it can help us think about new and different ways of doing things. It creates a chance for both of you to come to a deal as you assumed.

    Brainstorm possibilities and trades

    Technique 3: Brainstorming method

    Based on its advantages, making a scientific brainstorming chart is a fundamental way for beverage manufacturers to increase their possibilities and trade chances.

    1. Identifying your BATNA

    Before starting business negotiations, identifying a negotiator’s BATNA is necessary for developing the best strategies to use at the bargaining table. So, what is BATNA? BATNA (known as the Best alternative to a negotiated agreement) is defined as the probability to point out a negotiator’s best alternative to a negotiated agreement. That is one of the many pieces of information negotiators seek when formulating dealmaking and negotiation strategies.

    According to Harvard Law School websites, you need to take time out to process the information when bargaining. That will ensure you aren’t forgoing a good deal in hand for a BATNA in the bush.

    negotiate beverage contract manufacturers BANTA 

    Technique 4: Knowing your BATNA comprehensively

    1. Decide when, where and what attitudes during negotiations

    Preparation includes determining negotiation location, time, and behaviors that comfort your partners for any conditions. So, which are the critical success attitudes and behaviors that lead to your unlocking a winning streak in your beverage business negotiations?

    Decide location, time, and behaviors during negotiations

    According to the Negotiation export’s research, if you are pleased with achieving 45%, 50%, or 55% when on the table, then you can settle comfortably in your comfort zone. Fulfilling excellence demands that we depart from the confines of our comfort zones and address our mental attitudes.

    To sum up

    To come to a deal is always the ultimate goal of any business negotiations. Lack of preparation in a negotiation almost always sets a person up for failure, so we should attain enough knowledge and skills before entering negotiations.

    Thus, negotiation skill is the key to increase your success in the beverage industry. With it, you can cooperate with great partners, which can be a turning point for your future business.

    Lilian Nguyen
    Hi! I'm Lilian Nguyen. I'm an expert in OEM, ODM, private label beverage industry with 8 years of experience. I believe that it is crucial for companies to focus on the benefits which the product provides to their target customer and what does it mean to the community. When i am not working, i run a blog on making healthy snacks & drinks and join in a hiking club. I'm an expert in the beverage industry invited by Tan Do Beverage to work. I'm in charge of publishing articles, research articles on the beverage industry or anything healthy to help readers have a better view of what they are looking to do, prepare to do or are doing related to the beverage industry. Email: lilian.nguyen@tdfood.com.vn

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    Related posts