Private label energy drinks: Fundamental knowledge for a successful
Have you been overwhelmed by the various choices of energy drink manufacturers?
What is the most optimal energy product for your energy drink business?
How to customize your energy drink?
In what way can you develop your own energy drink brand?
Above is the question list includes common pain points of running the business with energy drinks. Among them, branding your energy drink is complicated and needs many efforts of both time and money.
However, this problem can be solved by the private label energy drink service. In this article, we would like to introduce the work of private labels to you, the reason you should customize, and then, the little-known secrets to finding an excellent manufacturer for your energy drink.
An overview of energy drink
Before getting a deeper look into a private label energy drink, let’s begin with the basic needed information about this product and its successful development in recent decades.
May you not know:
It is believed that the first original Energy drink was from Japan under the unique name of Lipovitan. More impressively, this drink also consisted of a taurine substance- which is the vital ingredient in the present energy drink. But it was not until 1985; that energy drinks were created in the USA and consumed worldwide.
To be more specific, Energy drink is regarded as the most favored list of functional drinks. With the broader and broader market size, Energy products, in general, are a trendy drink that brings a huge profit margin for the beverage company.
Energy drink consumption has approximately tripled from 2008 to 2017 and is forecasted a dramatic growth in 2021 and the future. As a result, Energy drinks can be an excellent selection for running a business in the beverage industry.
Why you should go custom for your energy drink
Breaking into the beverage market by energy product lines can be a significant opportunity for development. But how to produce and introduce it to the market in the most effective way?
Private label services can answer this question for you. For the time being, the Private Label service is considered one of the most optimal ways to launch your beverage business.
With the significant advantages that the Private label brings to entrepreneurs, this business model can ensure the fastest growth of the drink under your brand name.
Unlike other beverage types, Energy drink contains a traditional formula with some typical flavors. This drink always has its market segment with a specific customer number. Therefore, this is the first and foremost reason for using private label service for your energy product, resulting in other follow-up reasons.
In particular, we have found four leading causes why you should customize your beverage:
The first outstanding benefit of Private labeling energy drinks is saving time. When you get involved in this business model, you directly take advantage of our long-term research and developing product concept results, especially for a long-story development like energy drinks. From that, you can take time for other aspects to build your brand name and company’s profits by improving marketing and sales.
Not only a better return on time, but a Private Label also helps you save brainpower when getting the trade of your energy drink. In the state of running the business on your own, you can intelligently outsource each stage to particular experts. Your energy drink company would benefit from our professional team’s skills and intensely professional knowledge, to be more specific. This work to market an energy product is now becoming more superficial and faster.
Besides, Private Labeling is cost-saving. Because the manufacturer sells the existing energy drink for you, its formula and design have been identified already. As mentioned before, the formula of energy products is quite fixed with little flexibility compared to others. Therefore, skipping the formula development can be an economical method for your energy drink.
Mass production with a market-ready energy drink with a preferred formula can’t have more cost-waste than starting from zero with an undefined product’s concept. Moreover, after spending decades of years in this industry, we believe that our close relationship with different vendors will support you in reducing the cost of your energy drink.
Last but not least, by satisfying your customer with a trendy energy drink formula, you can avoid an unexpected situation from an inappropriate flavor. One more bonus benefit when you customize your energy drink is offering you the backend support that helps your drinks gain a vision of the long-lasting experience of the private label provider.
Private label energy drink cost
Being the first step in starting an energy drink business, identifying the cost plays a vital role in establishing the company concept and the profit direction. Creating a private energy brand has never been easy. And among various benefits that private labels bring to energy drink companies, the saving cost is the most apparent reason.
Private label energy drinks can help you save a tremendous amount of money for investment, as mentioned above.
To run an energy drink business, you need to consider two main types of costs below: the opening stage and the other for ongoing business.
Opening cost for private label energy drinks
Opening cost is the first amount of money that the energy company should spend for running the business. The cost with the highest percentage of Opening cost is fixed cost. To produce the energy drink with complete packaging, we need machines, equipment, location, labor force, and other settings. Besides, it is necessary to care for variable costs such as the ingredients for the beginning production of energy drinks.
On average, people have to invest $100,000 to start a small to medium-scale energy drink business. Here is some cost with their detailed estimated value:
- ¼ of that money goes to develop the energy drink concept, including formula and samples
- Other $25,000 for purchasing raw materials and other ingredients for your energy product
- $40,000 to pay for other sources such as inventory, distribution, and labor force
- Another $10,000 to get an initial advertising push
- Other for overhead cost
Ongoing expenses for private label energy drinks
The second type of cost is ongoing expenses. It is more representative of variable expenditures during production. Similarly, people can understand it as an operating cost that the business needs to spend daily. Some outstanding investment is for energy drink ingredients, labor, packaging, shipping, or storing.
As usual, ongoing costs are estimated by month with the approximately same amount. For instance, if your energy product cost for this month is $40,000, there will cost another $40,000 for the next month. However, due to the characteristics of variable cost, this number only remains if your producing capacity is the same. This cost will go down or up, corresponding to the volume of your energy drink producing quantity.
From the two main costs above, it can be seen that starting up an energy drink business is not easy; the cost needed to expense is not small. With a quarter cost for R&D to produce a great formula and adequate sample, you had better use private label service for your energy drinks. Let another company do it for you. Your most crucial left task is to develop your brand with a strong marketing strategy and increase sales revenue.
How to find a good private label energy drink manufacturer?
After investigating the advantages of private label energy drinks, there is no reason for you to refuse this optimal service.
When the demand for private label energy drinks has increased, it also leads to many different supplies. So, Does it have any criteria to judge them and how to select an appropriate manufacturer for your energy product? Understanding your difficulty, we have generalized and summarized some basic standards that need to be in a good energy drink manufacturer for private labels.
The ability of manufacturers with a high-rate energy private label service
The first dimension is the ability of the private label supplier. To manufacture and become a senior in the energy drink private label, these companies should be experienced in the beverage industry for at least some years. This ability is essential because it reflects its quality directly, implementing for:
- Quality of products
- Qualified employees
Being two different standards, they have a close mutual relationship. To make the energy products of high quality, we need qualified staff with expertise. Conversely, they also have to develop good energy drinks to bring profit and hire more skilled employees. It is considered that these two criteria are the core value of an effective private label energy drink manufacturer.
Appropriate and professional working manual
Here, we would like to mention the working attitudes of a good energy drink manufacturer for private labels. Apart from the capacity or the adequate skills and knowledge to work, the supplier of the private label should have a professional manner to satisfy us like the optimal way in creating a business relationship.
Private label energy drinks are the same as other types of beverages. They are asked to increase the number of loyal customers for the sustainability of development. The manufacturer will make an invisible link with an appropriate working manual, connecting to the energy drink business.
The capacity of production of a wonderful private label energy drink manufacturer
In addition to ability and working manual, producing capacity is another essential factor that you need to care about when choosing a private-label energy product. If you have a demand for a bulk of energy drinks, for sure, you need to find a manufacturer that can adapt to your requirements not only for quality but also quantity.
The scale of private label manufacturers can affect the short and immediate producing process for your energy products. You should ask yourself the three most common questions and then get a deeper understanding to optimize your energy drink. They are:
- Does it apply advanced techniques to the manufacturing process to upgrade productivity?
- Is it equipped with an adequate quantity of manufacturing machines?
- How simple is the purchasing procedure? Is it convenient for the customers?
Location of the private label energy manufacturer
Last but not least, to make it more and more convenient for your energy drinks, a manufacturer with a good location is one of the necessary distributors.
Why do we state that?
For the first reason, if your private label company belongs to the transportation hub system, there will be a great bonus point. To be more specific, when your energy beverage storehouse is near an airport, it is incredibly convenient for importing and exporting the goods and creates much more trade links with partners from foreign countries.
The second reason is that maybe in the suburbs, it can be good to have enough space for inventory in a good place. The storage process will avoid the barriers of limitations in the area. Regardless of all the subjective factors, a convenient location is one external factor contributing to the success of a private-label energy drink entrepreneur.
Private label energy drink low minimum order quantity
The last factor that’s worth mentioning is the order quantity. A low MOQ (minimum order quantity) ensures that you can save time and money on your first try. Producing a small batch of energy drinks won’t take too long and the cost of manufacturing and shipping is also reasonable. So if you are SMEs or start-up, take this factor into consideration.
Tan Do is a global beverage ODM/OEM manufacturer and supplier located in Vietnam. Since 1996, we have built trust and credibility not only throughout Vietnam but also in many parts of the world. Leveraging state-of-the-art technology, we have crafted thousands of products that align with ISO, HACCP, HALAL, FDA, and many other standards.
How to price your energy product?
As we all know, Redbull and Monster are the two most prominent companies that dominate the energy drink industry, and you can find them almost everywhere. To be honest, their market size is so large that people are familiar with their name rather than “energy drink.” On average, the customers need to pay around $2.50 for a drink, depending on where they live.
The author investigated a new small brand name: Venom. While the Red Bull and Monster were full on the shelves, Venom was always the best seller. Its secret is that Venom focuses on the competitive advantage of:
- Selling point: Unlike the two most prominent competitors, Venom chose the gas stations. It is unique and reasonable to have a functional beverage at the gas stations.
- Price point: Its price is only under $1 ($0,99), much lower than Red Bull or Monster. In this way, Venom can serve best for a specific targeted group of customers, solving the problem of low-income consumers.
Therefore, when you tend to price your energy products, you should concentrate on these two factors. Firstly, being smaller in the beverage market, you can reduce the cost-effectively by private label service, especially for the energy drink lines. Secondly, identifying the target customers is a crucial step, then you should be careful in choosing the touchpoints of selling your energy drink.
In short, this article mentions and highlights the five fundamental concerns when participating in a private label service for your energy drinks. We understand the problems when starting up an energy drink business and finding the most optimal solutions for you. Especially suppose you are looking for an experienced private label manufacturer for your energy drink with the best service and receive the advantages above. In that case, you cannot miss Tan Do- a credible partner of many beverage companies in over 30+ countries worldwide.