Subreddit: r/Entrepreneur
User: u/mrgarlicpickle
Original Post:
Thinking of starting a beverage brand aimed for a specific fitness niche. Terrible idea?
Hi everyone,
I have identified a gap in the market for a niche beverage brand that might get popular between young adults.
I have previous experience of scaling small businesses to 7-8 figures annually and I now want to do it for my own beverage brand.
Only issue, I don’t know jack shit about the beverage industry and would need to find someone to help me build the recipe. I am happy to look after the operations, marketing and branding side of things, but not sure where to get started with the recipe + production.
I will start reaching out to small beverage producers within my region to seen if I could get more information on this. But, also open for feedback here.
I have read some past posts about beverage brands and looks like everyone suggests that its an impossible space to break into because of the already existing billion dollar brands.
However, I am taking my inspiration from Olipop and would love to grow something similar.
Does this sound like a terrible idea?
My Response:
Hi, food scientist here who consults for beverage brands.
It's not impossible, but it is challenging in a way that's unique to the food industry because of the razor-thin margins and near monopoly that co-manufacturers, suppliers, distributors, and retailers. They usually have you by the balls because there's really not many out there, and they're not as likely to cater to small or new players.
For the most part, the actual formulation itself is fairly straightforward. Myself and my colleagues in the food industry often reverse engineer beverages; they're quite simple in design.
Therein lies the problem though, is differentiating yourself outside of formulation since there's a very limited moat. And since intellectual property is not something that's easily obtained in the food industry (patent laws do not recognize simple combinations, which include recipes and formulations), your only barrier to entry is the marketing.
Now, there's an intimate relationship between the technical process of formulating a beverage and the marketing, since how you design the product plays a role in what type of consumer base is interested in it. But there are limits to that logic - clean-label beverages are fairly challenging to formulate and require several months of testing at the benchtop before you can scale production. For example, organic flavors are generally less durable to heat treatment and processing than synthetic or natural flavors. Or that high-intensity sweeteners from natural sources have a different effect at certain concentrations than sugars; they also impact mouthfeel.
And scaling a formulation at the benchtop is its own beast, mainly because every co-manufacturer and co-packer has their own internal processes and approaches.
I am often kept out of conversations with them and brand founders because I know too much and could probably make a good estimate about how they conduct their productions.
But all-in-all, those are the major challenges that you'd face.
Are you working on a new food or beverage product? Interested in working with me and my team to get started?
Click on the button below to get in touch and set up a meeting today!
P.S. If you're interested in developing cannabis food and beverage products, head over to my good friends at Patric Food & Beverage Development, who are the go-to experts on cannabis-infused food product design.