By Richard Horwell, Brand Relationships
Scotland has many wonderful traditional and new foods and drinks to offer. If you are a Glasgow business owner looking to start a new food or beverage brand, or if you have a great idea for a new product and are thinking about making a career change there are a number of steps you need to take to do so forward.
Let me start off by saying that having an idea how to make something at home that tastes wonderful is encouraging is encouraging, but the important thing to know is that getting started with eating & drinking is far from easy.
Here are the steps you should follow before investing in your new food or beverage idea and starting a new business:
Do your research
We have so many customers who come to us with very little idea of the competition in the category they are trying to compete in. The more established a category – such as energy drinks – is, the more difficult and expensive it will be to assert itself.
Don’t just look in the UK, explore the rest of the world. You can learn a lot from the mistakes of other brands and get some great ideas from the flavors used. They can understand their messages to their audience, how well they are selling in their market and their retail price.
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Find your POD (Point of Difference)
Think carefully about your offer and why it will attract attention. It is true that some small brands have become big brands and even took over Coca Cola so the big players spent millions to get them.
But to stand out from the crowd, you need to have a POD so that your target audience will cross the street to buy your drink. Creating a fan base makes your brand attractive to the big players in the long term. they want your audience.
A difference isn’t just a funky taste or a more flashy packaging. It’s one of a kind. Mix up ingredients that others have never thought of and make sure it tastes great.
Know where the money is coming from
This is not a cheap industry to get into. The minimum requirements for production are a problem. You can come up with a production recipe (as opposed to one made in the kitchen), get a brand name and branding, and then try to raise the money to pay for a production run. However, it is virtually impossible to raise funds for just one basic idea. If you don’t have seed funding to get started, you may have to rely on family and friends to invest or donate, but doing so can be high risk and potentially damaging relationships.
Think carefully about where the money is coming from. It can take up to two years to do something. So make sure you can survive and have enough cash to pay for ads in wholesale catalogs, send out samples, and possibly visit exhibitions.
It is important to have a clear financial budget for your business, whether you are self-funding or going to investors. The taste, the name, the branding, the distribution, the samples, the presentation packaging for the buyers have to be right from day one. That takes money.
Recipe development for manufacturing
Successfully making your beverage at home does not mean that it can be accurately reproduced in mass production. We work with multiple recipe development experts to source the ingredients at a competitive price and make sure they work together – resulting in a drink that tastes like the one you created in your kitchen, but your co- Packer fits.
Some ingredients just don’t go together, this is a very special area and the recipe has to be perfect. So you definitely need expert help. Every contract manufacturer expects an exact recipe. And for packaging, you need to know all the nutritional information for labeling.
One area that many entrepreneurs overlook is novel foods. The Novel Food Regulation applies within the UK and the EU. If your ingredient falls under novel foods, you will likely have to pay for research to prove that it is safe for human consumption. (See: https://ec.europa.eu/food/safety/novel_food_en)
Not all ingredients are allowed to be used in beverages and this is protected by novel foods, so you need to be sure that all of your ingredients are actually allowed to be used. This will save you time in the future in removing obstacles that you could have overcome in the initial phase.
Make the important decision about packaging
This can make a huge difference in your costs.
For example, glass is the cheapest option because you can do the smallest production. But wholesalers don’t like it because of the weight and retailers because it can break. This is what makes it the hardest to sell.
Second cheapest is Hot Fill PET (plastic), which has a small volume because the PET bottles can be filled at high temperatures. The negative is that the bottles are ugly with massive ribs and the backlash of PET polluting the oceans – these bottles contain a lot of PET – consumers are turning away from this type of packaging.
Next up is aseptic filling, where the PET bottles are blown online and then filled under aseptic conditions to keep all insects out. After that, the contents in the bottle are pasteurized and all nutrients are locked in. However, the minimum runs are huge as the factory has to completely clean the entire line between flavors.
Fourth are cans. These are very popular now, but the minimum runs are high. For example, the minimum print run for printed cans is 150,000 and the minimum fill run is 75,000. There are ways of filling empty cans with a volume of 12,000 or more and then wrapping them. It’s a more expensive option, but a far better way to test the market.
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Fifth is Tetra Pak, but the box’s printed run is around 100,000 and needs to be used up within a year. It’s a tough option until you have the volume to justify it.
Last but not least is HPP (High-Pressure Processing) which is great for juices as the temperature is only 4 ° C so all of the goodness, antioxidants and flavor are preserved. The runs are small, but the cost is 10-15 pence per bottle just to put in the machine as pressure is used instead of heat to pasteurize. The distribution must of course be cooled.
Understanding the best type of packaging for your beverage and your target market is important – it’s a big part of your initial spend in order for you to want to get it right.
Find your co-packer (contract manufacturer)
These are the people who will bulk up your drink. They are a very important part of the process and so you need to be careful who you are working with. While there is plenty to choose from in both the UK and the EU, there are several companies that are more concerned with making money than making the perfect product. Then there are the big players who just don’t care about startups. Do your research and make sure the company you choose has a good reputation – maybe talking to other brands they have occupied? Also, make sure they have the correct certification as this question will be asked by retailers and wholesalers as soon as you start getting deals.
As I said, getting into the food and beverage industry is costly and you need specific, expert advice. However, it’s a great sector that is worth testing your idea out by following the steps outlined here. Perhaps your brand will become Glasgow’s next success story.
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THIS IS A GUEST MAIL FROM Richard Horwell, Owner of Brand Relations, a specialist food and beverage marketing and branding company based in London. For the past 10 years, Brand Relations has been behind the launch and development of over 80 brands in the UK. In addition, Richard has built and sold his own companies in the food and beverage sector. He has over 30 years of experience marketing FMCG brands around the world, having lived and worked in the US, Australia and the Middle East.