How To Start A Beverage Company: The Definitive Guide – Tan Do

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  • How To Start A Beverage Company: The Definitive Guide – Tan Do

    For the time being, our society has gradually adopted a new wave of entrepreneurship. Opening a new business has never been so accessible to regular people ever before.

    The beverage industry has always been busy and competitive. With millions of different kinds of drinks on every market, it is especially harsh for new and smaller businesses to build up and succeed in the long run.

    Suppose you are nurturing the idea for your beverage startup. In that case, this article will provide you with a guide on how to start a beverage company within 7 strategic steps.

    What Is A Beverage Business?

    Beverage company definition

    The beverage industry (also called the drink industry) includes a wide range of drinks, particularly ready-to-drink products. Drink production can vary significantly in which liquid refreshment may be canned or bottled (plastic or glass), hot-fill or cold-fill, and natural or conventional.

    There are many relevant sectors in terms of the beverage industry, such as manufacturing, distributing, retailing, wholesaling, exporting, OEM, and marketing.

    Now, suppose you have already had a brilliant beverage recipe or an innovative idea related to drinks. What you should do next is to take your products on the entrepreneurship journey – start your own beverage company!

    Doing business in beverages is likely to bring about many profitable opportunities. However, only the entrepreneurs who can acquire in-depth knowledge of products and customer insights can win the market. And this article will make it more explicit about what people should do to increase the chances of obtaining a successful business!

    7 Steps to Start A Beverage Company

    1. Perform Market Research

    step 1 to start a beverage company: market research

    Many entrepreneurs start without carrying out in-depth market analysis, and the result is obvious. They go bankrupt!

    Therefore, to avoid such a nightmare scenario, you need to comprehend the market size, type of market, market share, market niche, market competitors, and so on.

    What are the sources of this precious information? The most reliable option is to purchase market reports. Still, online tools (Google Keyword Planner, Google Trends, Google Surveys) are better choices for you if you rather not spend too much money.

    Only after knowing and understanding your market can you set up your own business. The first step is for you to answer the following questions:

    • What’s your product?
    • How does it differentiate from competitors? What’s the competitive advantage? Do you have it?
    • What value does it give?
    • Is there a need for your product? Who? When and why?
    • Do you have a recipe? Are you planning to use the services of beverage development companies?
    • Do you have enough capital to launch your product on the market?
    • Are you planning to raise cash from investors? How are you planning to do that?
    • Do you know what your break-even point is?

    2. Start Small, Then Scale Up

    Start a small beverage company then scale up

    It would help if you started small to handle what you have prepared efficiently. However, it would help if you also organized your business available for scale-up when the time is right. You should expand upon your existing processes and systems rather than creating entirely new ones.

    Specifically, you may want to find a co-packer to manufacture and package (OEM) for you in the beverage industry. That way, you can lower your capital requirements and allow you to focus more on developing your business.

    After that, you’ll want to find a beverage distributor, warehousing company, and retailers when you continue to grow. At that point, your products can be delivered to customers all over the nation and the world as well.

    Also, your firm might want to spread your beverage brand’s image, and marketing expansion needs to be considered as well.

    3. Build A Reliable Team

    teamwork in start a beverage company

    A field team plays a vital role in the success of any business because they are representatives and contributors to putting strategic plans into operation.

    To build a “team avengers” with the most brilliant and collaborative members. You need to look for partners that are willing to share your goals and dedication.

    Once you’ve found the right people to build your team, you want to establish closely-knitted relationships among them. The working environment should be taken into account to make them feel at ease when working together.

    Remote team working tools such as Trello, Zalo and Skype can also create a culture of accountability and excellence in your group.

    4. Have An Effective Execution Strategy

    strategy in start a beverage company

    At present, you have a phenomenal field merchandising team. In contrast, your best team will fall short of successful food and beverage merchandising without an organized retail execution plan.

    You must develop a plan and keep updating it as the market changes by giving answers to the following questions:

    • What are your competitors doing to generate attention?
    • What do your audiences respond to?  
    • What channels are suitable for approaching targeted customers?
    • What can set your company apart from other competitors?

    5. Design Great Packaging

    Packaging in start a beverage company

    Paying attention to the appearance of your product is key to creating its identity. Spend time designing a quality product because drinks with attractive packaging can give customers more incentives to buy them.

    It would be helpful if you came up with design ideas that are compatible with current packaging trends to make your beverage products more up-to-date and never neglect the practical parts of packing.

    No matter how eye-catching your product designs are, they will fail if they cannot fit on the shelf or in displays or if their shape and size are impractical.

    6. Advertise

    communication and beverage brand illustration

    Promotion is an essential element in distribution across the benefits of your products or service to customers. A well-designed marketing/promotional strategy ensures long-term success and brings in more customers and profit.

    There are many methods of advertising, namely:

    • Brand Positioning
    • Digital Presence
    • Blogging
    • Social Media Marketing
    • Email Marketing
    • Hosting Events
    • Offer Discounts & Coupons

    7. Keep Changing

    Keep changing illustration with paper airplane

    It is a common fact that the F&B market is regularly growing and replying to consumers’ demand. Trends, for instance, like health beverages or energy drinks, come and go.

    Therefore, to survive and expand, your company should continuously adapt your products and approaching methods to provide customers with what they aspire to.

    Your company can only exist and lucre if it is based on long-lasting relationships with customers.

    To do that, feedback from your customers may be a precious resource because customer feedback will lead you directly to your following decisions – what will you expand upon? What will you cut back on?

    By basing decisions on customer needs, you can ensure the success of your product.

    5 Successful Examples in the Beverage Industry

    1. Saigon Beer Center Trading Joint Stock Company (SABECO) 

    Sabeco is one of Vietnam’s leading beer manufacturers. It was established under the authority of Vietnam’s Ministry of Trade and Industry but is now a subsidiary of ThaiBev.

    In 2011, Sabeco produced 1.2 billion liters of beer, 51.4% of the national market. Its leading brands are Saigon Beer and 333 Beer.

    2. Asahi Group Holdings, Ltd. 

    This is a Japan-based holding company principally engaged in the manufacturing and sales of liquors, beverages and food in Japan and foreign markets.

    The Alcoholic Beverage segment includes the manufacturing and sale of alcoholic beverages, such as beer, low-malt beer, shochu and whiskey.

    The beverage segment involves the manufacturing and sale of soft drinks. The international segment involves in the manufacturing and sale of all the mentioned beverage types.

    ASAHI GROUP HOLDINGS brand identity

    3. Keurig Dr Pepper Inc. 

    Keurig Dr Pepper operates as a beverage company in the United States and internationally in four segments. The Coffee Systems provides single-serve brewing systems and specialty coffee to homes, offices, restaurants.

    The Packaged Beverages manufactures and distributes packaged beverages for its brands, as well as private labels.

    The Beverage Concentrates manufactures and sells concentrated beverages. The Latin America Beverages segment offers bottled water, vegetable juice, carbonated mineral water, and flavoured carbonated soft drinks (CSD).

    Keurig Dr Pepper brand identity

    4. Nestlé SA 

    Nestlé is a nutrition, health and wellness company. Its wide variety of products include prepared dishes and cooking aids, baby foods and cereals, milk-based products, pharmaceuticals and ophthalmic goods, etc.

    The company products portfolio includes powdered and liquid beverages, water, milk products and ice cream, nutrition and health science, prepared dishes and cooking aids, confectionery, and pet care.

    Nestle brand identity

    5. Tan Do Refreshing Water Co., Ltd. 

    Founded in 1996, Tan Do is one of the leading beverage manufacturing companies in Vietnam. We promise to improve customers’ living standards through nutritious product lines with a commitment to high-quality ingredients.

    Tan Do is well-known for our private-label services (OEM) for customers worldwide, and you can learn more about our services here!

     

    Tan Do Refreshing Water Co., Ltd.Conclusion

    The beverage industry is a highly competitive one. However, with the right products and solid business strategies, you can still start your beverage company and venture toward success.

    We hope that this article has been helpful to you. Let us know if you have any questions or comments, we’d love to hear from you!

    The 2nd tutorial How to start a beverage company

    Soft drinks or beverages are on the list of essential consumer goods because the daily sales of these products are extensive. Therefore, the beverage market has appeared many big brands that have had a foothold with consumers for a long time. However, with an increasing population, the beverage market still has great potential, especially for newbies with unique products and the ability to capture a significant market share. The following article will share some tips about how to start a beverage company successfully.

    Almost every new beverage company considers significant ways to build a successful brand in this market.

    Stage 1: Building ideas

    What are products?

    The first factor you need to determine before embarking on the beverage branding process is what you will sell. According to a recent report by the Vietnam’s Competition Administration Department, there are about 300 types in the world market with many different features and effects such as cooling, recovering skin, slimming, healing, and promoting healthy function.

    In general, there are three groups of beverage products in the world market:

    • Group of carbonated soft drinks: a drink usually contains saturated carbon dioxide water, sweeteners and often has added flavoring.
    • Group of non-carbonated soft drinks such as fruit juice, soy milk, Non-degree green tea, bird’s nest water, canned coffee, energy drinks, etc.
    • Group of mineral water and bottled purified water.

    Who are products for?

    Before you even think about creating a detailed business plan, you need to determine which customer segment your beverage of choice is inclined to. For example, with energy drinks, customers are mainly adults, and tend to choose the type of drinks that help improve resistance and enhance productivity during the day. At the beginning stage, choose to enter a niche. Most products cannot satisfy all people’s needs or tastes of all ages, genders, or professions. It would help if you learned how to classify the market, group your customers according to specific criteria, and direct your products to that customer group.

    Formulations of products

    Every day, dozens of new beverage products are introduced to the market. Therefore, before launching your product, you must build your drink recipe, develop and test it in the lab, and find the best raw material suppliers to make it. You can build, test and develop your drink recipes or consult recipe research labs to get the most accurate results.

    Read more: 6 Tasty Recipes with Coconut Water Juice You Can Start Making at Home

    Beverage formulas that meet quality standards and hygiene, do not contain allergens and affect human health will be kept. Finally, with standard recipes, you will prioritize choosing recipes with delicious flavors, especially suitable for the tastes of the customers you are targeting.

    Unique drink recipes are a main contributor to effective methods of building a drink company.

    Stage 2: Building a business plan

    External and internal factors always influence the business activities of enterprises. Therefore, a business plan helps companies orient their operations in the future through analyzing and forecasting the business environment.

    Should know: 7 easy steps to create a comprehensive beverage company business plan

    Overviews and Objectives

    You should start from basic factors:

    • Identify your industry: Number of retail, wholesale, services, manufacturing, etc are the critical information you should collect. Besides, clearly defining your type of business is necessary because it will affect your company’s operating way and later legal issues.
    • Identify the problems you need to solve: Successful businesses create customer value by solving problems. For example, many customers want a beverage product that has both a delicious taste, high nutrient content and good health. Or for customers who are prone to allergies to certain ingredients in soft drinks, businesses need to find a solution to that problem.
    • Prepare scenarios to solve the above problems: After identifying the issues that may arise when entering the market, you need to create a plan to deal with them. What resources you use, the partners you can consult, how you deal with it, etc.

    Next, define specific goals when entering the market. You can use specific numbers to illustrate your ideals. For example, as a beverage business whose primary products are fruit juices, your particular goals for the first three years are:

    • Accounting for the largest market share in the industry of fruit juices in the country X.
    • Generating a net income of $…. at the end of the first year of operation.
    • Minimizing rental inventory replacement costs by maintaining a 7% attrition rate on existing equipment.

    Market Analysis

    The SWOT model is a well-known business analysis model (or matrix) for all businesses that want to improve their business situation with the right direction and build solid development foundations.

    In short, a business SWOT analysis includes the following aspects:

    • Strengths: The characteristics of the business or project that give it a competitive advantage over competitors.
    • Weaknesses: The characteristics of the business or project make the business or project weaker than the competition.
    • Opportunities: Environmental factors can be exploited to take advantage.
    • Challenges: Environmental factors can negatively impact the business or project.

    The SWOT matrix is usually presented in the form of a list.

    Marketing planning

    A systematic and scientific marketing strategy makes it easier for you to manage its marketing activities and turn business goals into reality.

    Not miss: Sampling marketing strategy-must try steps to extend your brand

    At the above stages, you have identified a specific audience and target market for your beverage brand. Therefore, when building a marketing strategy, you can follow these three basic steps:

    Step 1: Writing a goal according to the SMART principle

    A SMART goal is a specific (S-Specific), measurable (M-Measurable), achievable (A-Achievable), realistic (R-Realistic) and limited time limit (T-Timetable) goal.

    It means all of your goals need to be clear and include the timeframe you want to accomplish them. For example, a specific, measurable, and time-bound goal is to increase your business’ Facebook fan page followers by 15% within three months. Depending on the business strategy, this goal is achievable and not far from reality.

    Step 2: Building your strategy

    At this point, you have written down goals based on your target audience and current situation. Now, you have to figure out which tactics will help you achieve those goals. In addition, you need to choose the proper channels and action categories to focus on. For example, suppose your goal is to increase your business Facebook page followers by 15% in three months. In that case, your tactics might include hosting minigames, actively responding to comments, and posting at least three times on Facebook per week. Once you know your goals, it becomes easier to brainstorm some tactics to achieve those goals.

    Step 3: Set your budget

    Before you can start implementing any of the ideas you’ve come up with in the steps above, you have to know how much money you’ll be spending. For example, your tactics include running ads on social networking sites. However, if the company’s budget is not enough, you will not be able to do it and cannot achieve the goal you set. While you write down your strategy, estimate the costs required for those activities and ensure it stays within your budget.

    Marketing tools help businesses dominate the market, increase market share, and accelerate product consumption.

    Operations/Organizational structure

    An effectively structured organization will help a business be stable enough to execute its strategy, maintain its current competitive advantage, and be flexible enough to develop competitive advantages for its future system.

    An organizational chart defines an organization, giving people an overview of how a business is organized, whether it’s an office, a start-up, a manufacturing plant, or something else.

    Features of an organizational structure:

    • Allocation of decision power: Who has decision-making power in the organization? Businesses will know what kind of structure their organization belongs to. If decision-making power is concentrated in the hands of only one individual, the organization will be in a centralized structure. If the power is divided among many people, it is a manifestation of the hierarchy.
    • Departments division (Also known as departmental specialization): The higher the specialization, the more the business benefits because it allows employees to master each specific area. However, low specialization offers flexibility because employees can easily handle a variety of tasks.
    • Sector division: This involves the process of working between departments. If the organization has rigid divisions, the interaction between departments will be limited. There are five methods of dividing business segments a drink company can apply:
      • By function
      • By product
      • By region
      • By process
      • By customer

    Production, delivery and logistics of products

    A production plan is a plan for manufacturing that shows methods, resources and cost of manufacturing products. There are many different production methods: producing one type of item, mass production, regular frequency production, etc.

    • Number of products to be manufactured: Beverage businesses need to determine the amount of product to be produced in each specific period. It affects not only the end goal but also the marketing plan and inventory of the business.
    • Production methods: The business needs to decide how to manufacture its products: stages in the production process, techniques to satisfy the product, which part or process is self-manufactured/outsourced, etc.
    • Materials and other resources: it is necessary to determine the value and quantity of inventories of supplies, product distributors, substitute materials, etc., and forecast possible hazards and threats during the production of beverages.

    An effective product production process must ensure the factors of equipment, technique as well as production costs.

    CONCLUSION

    In summary, the above article has detailed the specific steps to set up a successful beverage business. Companies need to invest time and effort to complete tasks perfectly, from defining the market to creating an idea or producing a product.

    However, operations management is not easy, even for businesses that already have a foothold in the market. At Tan Do Beverage, we provide Beverage Private Label (ODM) and Beverage Co-Packer (OEM) services. Customers will be supported from ideation, planning until the product is produced and launched into the market. These are relatively valuable services, especially for newbies in the beverage market.

    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

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