Most aspiring beverage entrepreneurs think of their first year as the year in which they kick off production and begin the journey of putting their brand on store shelves everywhere. They think they can simply take their idea and turn it into beverage reality right away.

What they don’t realize is that there’s another year that comes before that first year – the real first year in which the product itself is born. The following tips will help those new to the beverage industry more successfully navigate that first year and avoid the mistakes of all those who have come before them.

Take Advantage of the Help That’s Out There

Twenty years ago, there were no resources to help guide budding beverage entrepreneurs. Today, help is everywhere. There are interviews, articles, and videos online where those with knowledge and experience in the industry share their war stories with those who are just getting started. In addition to this, companies like Beverage Trade Network help guide beverage professionals through a crowded and competitive marketplace.

Don’t ignore these useful resources. The head of a beverage startup must reach out, attend trade shows and conferences, and be willing to soak up all the information that’s available. The ability and willingness to learn quickly are a sign of a good leader and one that will come in handy as the company begins to grow.

Create a Product That’s Magical

When a customer picks up a new beverage product, they do so with the expectation that it will give them some sort of experience. They want a beverage that will make them “feel” something – not necessarily in an alcoholic sense, but in a way that makes them connect with the product.

That connection is key. Great brands create emotion in their consumers, and those consumers turn the brand into part of their lifestyle. Beverage startups have to put forth a magical idea about what makes their product something special. This is what will drive customers to develop a loyalty to it – and those loyal customers will become the company’s brand ambassadors.

Before launching a new product, it’s essential to do market research to see what else is out there and how a new product will be something unique that will truly make its mark in the world.  

Craft a Business and Marketing Plan

There’s a flurry of activity after a product has launched, which is why all companies should craft a business plan beforehand. It will include things like market analysis – an understanding of the Annual Average Growth Rate (AAGR), who the competition is, and what the product will be facing once it’s launched. This will help decision-makers answer questions they have about where the company is headed, as well as obtain useful data they need to move forward.

Sometimes, creating a business plan will reveal that the current direction – or current product being planned – is a bad idea. Research may uncover several similar products already on store shelves. A business plan gives the company a chance to shift gears before it hits a wall.

On the flip side, a business plan paints a comprehensive picture of the business and its goals, allowing leaders to see right on through to the first hundred million and beyond.

Another piece of the puzzle that must be in place preproduction is a solid marketing strategy. This needs to be mapped out before a product goes to market. Beverage entrepreneurs must know who their target demographic is, what makes their product different, and where they will focus once they enter the market. Will they sell their product exclusively online, stay local initially and sell in mom and pop stores, or look for national distribution deals?  

As an entrepreneur launches their new brand and lays everything out on paper, they also need to ensure that they’ve secured their brand/product trademark. This seems like a small detail until they have cases of product labeled and marketing materials made up…and have to change it all because someone else has already trademarked the name.

Focus on R & D

Next, comes research and development. Those who are new to the beverage industry often don’t realize that what works well in small test batches doesn’t always work once a company goes into full-scale production. Products not only have to be tasty; they also have to be consistent and safe.

Spending time on R & D means getting an exact formula that creates a consistent and pleasing taste and feels, as well as color and aroma every single time. Cost and function also play into the R & D equation. Some beverage entrepreneurs go into the game thinking that they only want to use the highest-quality, most exotic ingredients in their formula. This sounds wonderful until a cost of goods analysis indicates that each bottle of beer will cost the consumer $15. Working with a formulation lab can help companies get an idea of how much the ingredients cost before committing to a dead-end, high-cost formula that will price the product out of the market.      

Arrange Distribution Before Production

Countless beverage companies make this mistake: they produce a huge amount of product because they simply know they’ll get a purchase order on it immediately…except they don’t. The product sits and sits. This ties their money up, leading to stress and frustration.

The best way to proceed is to produce enough samples to use in meetings with potential distributors. Once a startup has the support of a distributor and there’s somewhere for their beverage to go, it’s time to go into production.

Ready? Set? Go!

Getting a new beverage company up and running isn’t easy, but it’s exciting to work in a fast-moving field of hard-working, passionate people and rewarding to create a product that becomes part of customers’ everyday lives.

The first year of post-production will go by in a blur, as will all of the years after. With the right vision and careful planning in the very first year, however, beverage entrepreneurs can avoid pitfalls and put their products on the fast track to shipping success.