9 Steps to Starting a Beverage Company
Everything you need to know to properly start the next great beverage brand.
I've got some awesome tips to help you launch that exciting beverage company you've been dreaming about! It'll give you the freedom to ditch that full-time job, and who doesn't want that, right? The only trouble is, most people don't know where to start. But fear not, I'm here to make it super simple for you.
STEP #1 - Choose Your Beverage
It seems obvious right? But I speak to a lot of people who aren’t even sure what beverage they want to make. Think about what you wish you had as an option in the store.
Use this short checklist to help guide you.
✅ Is it different from the competition?
✅ Do you feel strongly that you can follow through on producing it?
✅ Does something like it already exist?
CPG strategist Caroline Grace has this to add. (Follow her on LinkedIn. She's brilliant.)
1. Start with search terms, what's up-trending, and who's buying. Check Faire, Mable, Amazon, Google, and even CPGD.
2. Go to your local retailer and see what only has 1 SKU and who owns what keywords. Bonus points if it's a retailer tailored to who the consumer is in step 1
3. Combine weird unexpected categories, ingredients, or products
4. Get feedback on the idea from that same consumer and others
STEP #2 - Formulate Like a Pro
Yes, there are people who ONLY come up with formulas and recipes for new beverages. They are your new best friend.
Do a quick Google search “beverage formulation” and you will find quite a few of them. They range in price, but you can expect to pay between $5k and $15k per SKU depending on how complicated your beverage may be. Some of these companies will also manufacture your beverage.
I like the good folks at the Beverage Incubators. They specialize in working with smaller companies to develop unique flavors on a reasonable budget.
STEP #3 - Meet the Co-Packers
Sometimes called a contract packager or co-packer. These fine folks will take the recipe from your formulation company and scale it up. Here’s what they do:
They store all the ingredients.
Make the liquid at scale.
Fill the cans or bottles.
And attach the labels.
They will then ship your product to you so you can begin selling.
This is by far the most expensive part of the process and all of the co-packers will have minimum order quantities (MOQs). MOQs can vary from company to company but I have heard of some doing as few as 500 cans. Be sure to talk to a few and find one that can handle an MOQ that fits your budget.
At this stage, you are going to be taking care of a ton of the legal and food safety aspects. Here is a short list of some of the things you will cover:
✅ Micro testing
✅ Shelf-life verification
✅ Nutrition information
✅ Legal label checks
✅ Allergen controls
✅ Verifying any claims
As Lisa Marie Johnson says, " Your co-packer may do some or all of this for you but ultimately it’s your responsibility to ensure everything has been covered and documented."
For more detailed information about working with a co-packer, reach out to BevSource.
Here is a great list of co-packers and partners from BevNet.
The Elephant in the Room
By now you probably just want to know how much this going to cost.
You will need around $100k to start your beverage company.
Did your eyes just pop out of your head? I hope not, because if you nail the branding and marketing you can start to see success very fast.
STEP #4 - Fund Your Dream
Finding funding to start a beverage company can be a challenging process, but with careful planning and determination, it's definitely possible. Here are some steps and options you can explore to secure funding:
Business Plan
Start by creating a detailed business plan that outlines your beverage concept, target market, competitive analysis, marketing strategy, financial projections, and funding requirements. A well-structured business plan is essential when approaching potential investors or lenders.
💡Need help? My partner Ryan Hansen and I review business plans to make sure everything is covered.
Personal Savings
Consider using your own savings or personal funds to invest in your beverage company. This shows potential investors that you have a personal stake in the business.
Family and Friends
Reach out to family and friends who might be interested in investing in your venture. However, be cautious when involving personal relationships in business matters, as it can lead to complications if things don't go as planned.
Angel Investors
Look for angel investors who are willing to invest their own capital into early-stage startups in exchange for ownership equity or convertible debt. Angel investors can provide not only funding but also valuable advice and connections.
Venture Capital
If your beverage company has significant growth potential and requires a larger amount of funding, consider approaching venture capital firms. These firms invest in startups and small businesses in exchange for equity ownership.
Crowdfunding
Platforms like Kickstarter, Indiegogo, or GoFundMe can be a great way to raise funds for your beverage company by getting the support of a large number of people who believe in your idea. Be sure to create a compelling campaign with attractive rewards for backers.
Small Business Loans
Explore the possibility of obtaining a small business loan from a bank or credit union. Make sure to have a solid business plan and collateral to increase your chances of approval.
Government Grants and Programs
Research if there are any government grants, subsidies, or programs available to support food and beverage startups. These opportunities can vary depending on your location. There are more of these options if you are a female or minority founder.
Incubators and Accelerators
Joining a startup incubator or accelerator program can provide you with funding, mentorship, and resources to help your beverage company grow. These programs often accept early-stage businesses with promising ideas.
Industry-Specific Investors:
Seek out investors who have a particular interest in the food and beverage industry. They may have a better understanding of your market and be more willing to invest in your venture.
Two well-known VC firms for the beverage industry are AF Ventures and First Bev. For both of these, you will need to have your numbers in order and a compelling pitch deck, which I am more than happy to help you with.
Remember, securing funding takes time and persistence. Be prepared to pitch your idea confidently, highlight the potential for growth and profitability, and be open to feedback and negotiation with potential investors. Additionally, ensure you have a clear vision and a well-thought-out plan to demonstrate that your beverage company is worth investing in.
STEP #5 - Craft Your Brand
Did you know that Liquid Death had orders from 7-Eleven before they put a single drop of water into a can? That’s right. You can do the same thing.
My entire process is set up to follow the Liquid Death model and start marketing and building the brand while you are waiting for production to happen.
It all starts with a blueprint session where we figure out:
Why do you do what you do?
What do you want to be known for?
Who your ideal customer is?
What does your competitive market look like?
Opportunities for you stand out
And how your brand will look and sound
Before you know it, you will have a complete picture of your company and you will be able to start marketing. This the best way to test the market and see if you're product will resonate with customers.
This is exactly how I helped Bennu narrow its target audience to focus on marketing its beverage toward busy parents rather than trying to be everything to everyone. They had 300+ followers and nearly $2000 in pre-sales before their first production run even started.
STEP #6 - Design Your Killer Brand Identity
Wait, didn’t we just develop the brand? What is the brand identity? I’m confused. It’s ok. There is a difference.
Your brand is your reputation. It’s what you do. How you treat customers. How good your product is. How quickly you fulfill orders. How do you handle returns etc.?
Your brand identity is a collection of designed objects that your customers can recognize in a crowded market. It’s how you look.
For beverage brands that consist of:
Labels
Logos
Secondary packaging
Website
Social media templates
Event collateral
Photography
Tee-shirts
Your brand identity should reflect your reputation, but it doesn’t create your reputation. The most important thing for new beverage companies is that people trust you. A well-designed and complete brand identity system will make people much more comfortable trying your beverage for the first time.
STEP #7 - Create Compelling Content
Before you have a product to sell, you can start to connect with your ideal customer on social media. Sure, you can begin to teach them about what ingredients are in your beverage but…that is going to get boring fast.
So you are going to need what we call Storytelling Buckets. These are topics that your ideal customer cares about that you can post about to inform, inspire, and entertain your audience. Trust me, no one wants to just see pictures of your drink over and over again.
We can help you start to think more like a magazine (I worked in magazines for 15 years) and less like a beverage company.
Here's how:
Interview real people who match your ideal customer avatar
Identify things they struggle with on a daily basis
Cross-reference those struggles with your own struggles
Share stories about those overlapping experiences
Be entertaining, informative, or enviable.
Do not sell! People can sniff it out and they hate it.
The best thing you can do is post content of value that people find so interesting they are willing to share it.
Combine this with:
Design elements in Canva
Rock solid calendar
Commitment to engaging with comments
And you can start generating revenue with pre-orders on your website. Yes, money in the door before a single drop of liquid is in a can.
STEP #8 - Blast Off! It's Launch Time
The day has come. Your beverages are here. Your mailer boxes are here. You have pre-orders to fill. You can announce to your followers that its all real.
So what next?
You are going to be out in the field, putting cans in hands, telling your story, and gathering feedback. The good news is, because of all the work that we’ve done together you are going to be so confident interacting with customers that they are going to love you. It’s all about confidence and trust and you will have it in spades.
So where do you go to find put those cans in hands? It’s best to start with events in your area. Farmer’s markets are a great place to start, but…I advise you to find events where 90% of the attendees are your target audience. Don’t worry, because we know your ideal customer super well, it will be easy to find events that are packed with potential customers and you will be the only beverage company in attendance.
STEP #9 - Woo Those Retailers
After you have some real numbers through your website, feedback from customers, and a following worth bragging about then you can talk to retailers.
Caroline Grace does not recommend just showing up at local retailers.
"That usually means wasted sample and wasted time. Call them or email them first," she says. "And local might not be right for your brand. Start with who's buying your product, then build an indie & alt entry strategy from there. Oh, and get on Faire to easily manage your early retail accounts."
Don’t spread yourself too thin. You just need one to start so you can learn how much it takes to support that retail presence.
You can use your social media following to push sales to that physical location rather than your website. Make sure you have enough product to restock and keep those shelves filled. Use information about how fast the product is moving to approach the next retailer. And on and on.
How Long Will This Take?
With our guidance and support, you can expect your journey from idea to launch to take around 4 months. But the process doesn't end there! We'll continue to be there for you for another 8 months to help you navigate the challenges and celebrate your success as your beverage business thrives. You'll have the knowledge and confidence to conquer the market and become a successful beverage entrepreneur!
So I will be there to support you to make sure
Your social media presence continues to grow
You have everything you need for demos and events
Your e-commerce system is efficient
You can approach and support new retailers
I know what it’s like to be a solopreneur. I can be your sounding board while you are going through growing pains.
This is by no means the only way to do things. "Any 'how-to' guide depends upon the goals of the brand," explains Matt Whiteside co-founder and ceo of Circle Beverage. "Is it seeking rapid nationwide adoption? Regional or local focus? Long-term operation or seeking acquisition/exit? These scoping factors will greatly sway the decisions that need to be made in the early stages."
That’s the process I’ve used to launch and help beverage brands sell out of their first batch of beverages. Starting a beverage company is exciting, demanding, and a little bit scary. I hope this plan helps you sort out exactly what you need to do next to start your business
Bookmark my site. When you have gotten through the first 4 steps, come back and book a call with me.
I am here to help you avoid costly mistakes and give you all the support you need to launch your business to a crowd of adoring fans.
About Coppergate Design Company
I'm here to help brands find their voice, and translate that voice to products that resonate with a passionate audience. Our clients are our partners in crime: I measure success by how our work together helps your company grow. Want to chat about your company, products, or goals? Drop a line to michael@coppergatedesign.com
