Starting a Beverage Company
Crafting a solid business plan is critical for starting a successful beverage company. The U.S. beverage market is a $354.2 billion industry with alcoholic beverages making up 60% of the revenue. This provides a lot of opportunity for growth if you are looking to start a profitable business.
Doing your due diligence and outlining a clear business plan will help you minimize missteps and make starting a beverage company easier and more successful.
Complete an analysis of the adult beverage market.
Having the motivation to start a business from the ground up takes a lot of passion, but for your business to profit, identifying market trends will help position your brand for success. Entrepreneurs often believe their product will appeal to "everybody" and charge full speed ahead with only limited data. In truth, before you launch a business you need to research, research, research. In an article for Inc., distiller Ralph Erenzo said, "the liquid in the bottle is important, but the brand you build up around it, and the story you tell is really important."
This analysis should include local, regional, national, and international competitors to help you identify gaps in the market that your product could fill. On a local and regional level, you'll often find other business owners are willing to exchange information and personal experiences to help another local business get a head start. Success at this level will help strengthen your marketing position and open you up to other financial avenues. Even if your long-term strategy includes international acclaim, working from the ground up will help you iron out essential business details before you go global.
Here are some questions to ask yourself when starting a new adult beverage company:
- How do I differentiate from my competitors?
- What value does my adult beverage give?
- What are my main sales channels?
- Who is my target demographic?
Wine, Beer, and Spirits Manufacturing
Now that you've identified who will buy your product, it's time to formulate how you will make it.
Own your brewery, distillery, or vineyard.
Select beverage companies own their breweries, distilleries, and vineyards. The alcohol industry has many regulations, and if you choose to produce your own product, it's advisable to become familiar with the intricate laws. Each state governs its own set of requirements so you'll want to look into the cost of the required licenses and permits to start production.
Sourcing production equipment and ingredients will require time, but there are plenty of opportunities to find quality options that fit into your budget. Before you can start producing your adult beverage, most states will require an inspection of your facility. Hiring a team of experts can help navigate these detailed steps to ensure you pass all the requirements to get started. The benefit of owning your operation helps you maintain control over the quality of your product, manufacturing time, and can reduce overhead.
Work with a certified adult beverage manufacturer.
Working with a certified adult beverage manufacturer is another option for production. There are plenty situated across the country that produce various adult beverages. It's advisable never to agree to do business with a manufacturer over the phone. Onsite visits give you the opportunity to discuss and view efficiency.
In a recent article from Micro Brewer one owner says, "I’d say the most important thing would be to know the equipment manufacturer that you buy from – make sure you trust them and that they do good work." Partnering with a certified manufacturer might not provide as many cost-cutting opportunities as producing your own product, but you will save time and deal less with legal regulations as the manufacturer will already have everything necessary to start producing your product. Additionally, the cost for outsourcing will already have factored in packaging, bottling, employee salaries, and legal licenses.
Properly outlining a financial strategy is crucial to success. This attention to detail affords you the opportunity to have a realistic goal towards growth and expansion. Down the road when you start talking to investors, your financial strategy will play a pivotal role in their decision.
When you are putting together your plan, here are things to consider:
- Sales forecast
- Expense budget
- Cash-flow statement
- Income projections
- Assets and liabilities
- Breakeven analysis
Brindiamo Group is a team of veteran beverage industry entrepreneurs with a unique approach to assisting business owners with development on all fronts to help you reach your goals. Get in touch today to reach the next level of success.