Beverage Development Mistakes That Cost $50,000 in 6 Months

Jorge Olson

February 17, 2011

Beverage development can be easy, quick and a lot of fun

Beverage development can also be very difficult and painful. Costing you years and at least $50,000 in only 6 months without

Over the years I’ve seen many companies wasting $10,000, $25,000, $50,000 and up to $100,000 in Beverage Development without having a good product we can sell…

Mistakes in the formulation, in production, in the artwork. How many companies have I seen? Many. I see at least 5 companies every single month that already spent too much time and too much money

Here are some examples of mistake made on an everyday basis...

Mistake # 1: Not being the primary decision-maker in your beverage product development by allowing someone else to develop your product for you.

This mistake can be thought of as choosing to outsource versus in-sourcing. Are you going to take charge of your product’s development process, or let someone else make the decisions for you.

First, let’s talk about outsourcing. Outsourcing is the practice of contracting out work to a third party. This practice is most commonly used today by big companies for telephone customer service. However, many people who are seeking to develop a new product, and lack experience, will also use third party beverage development firms.

There are several problems with using these types of companies:

  • Lack of decision making power
  • Expensive start up costs
  • Expensive long term contracts that require more money at the beginning of each new step in the beverage development process
  • You are kept out of the loop, and gain no knowledge of beverage development from the process.
  • You will lack an understanding of the beverage development process
  • You don’t get the information, contacts, or direct relationship with suppliers
Are you looking for beverage development? or beverage formulation or production? I have a course for entrepreneurs, on beverage development strategy, formulation, production, finding brokers, beverage distributors, and even with your financial projections, pricing strategy, and sales and marketing. We want to be your long term partner and see your beverage selling in convenience stores and supermarkets all over the country!

Many third-party beverage development companies take your idea and handle the development process to create a product. The problem, however, is that they make many of the decisions for you in their best interest. These types of beverage industry companies take full control of the beverage development and handle most of the development process on their own. They have in-house flavor labs, formulators, and bottling design departments and therefore can bring your product from idea to reality without much input from you.  The sad part is the formulas can’t be used with beverage bottlers and you have to start all over again.

The problem with this is that you want to be able to understand the beverage development process and every step in it. Once your product is developed, you are still responsible for running your business and selling your product. Don’t you want the confidence in your product that comes from being fully involved in every step of the production process? Of course you do! In order for that to happen, you need to have control over your product and be able to work directly with formula/flavor houses and bottling companies.

Don’t Outsource Your Beverage Development – Learn how to develop your FMCG for funding, sales, and distribution

Instead of outsourcing your beverage development, you need to in-source. As the manufacturer, you need to be in charge of finding flavor houses, bottling companies, marketing firms, and distributors. Or at least understand how it is done and do it together with your consultant, employee or project manager.  You need to work with these companies directly so that the vision you have for your product is achieved. You need to take the time to learn as much as you can about developing your product so that you can have control and confidence around your new product. Learn everything you can about the different businesses involved in the development process so that you can rely on yourself instead of relying on another to the company to make decisions.

If you feel that finding and working with all the different types of companies involved in the development process to be too daunting, there are other companies out there that can help. Companies such as Wholesalefund can help you make connections with development companies while also giving you control over your beverage. Look for companies that offer to consult and help with managing different aspects of your beverage development process. These companies will give you assistance without taking any power away.

Remember don’t hand over your beverage development, your beverage project or your beverage company to someone else.

Mistake #2: Out of the loop -No beverage development know-how

When a manufacturer is seeking beverage development, they look for businesses that can help: flavor houses, bottling companies, etc. However, a common mistake they make is that they do not do enough research to find the right company for them or the company wants them “out of the loop.  Most of the time, they settle for a company, instead of getting exactly what they want. What should you want? Service, Knowledge, Mentoring, Project Management.  Not to mention sales and distribution; even in the beverage development process.

Maybe a formulator you find will work just fine, just OK, but they do not specialize in what you need. Why settle for that? Why not do your homework and search for companies that specialize in exactly what you need and will be the best for your beverage? Manufacturers often don’t do due diligence; investigating the company they find to develop their product. Don’t be lazy and settle on the first company that you can find; be discriminating. In the end, it is your product that you want to sell, wouldn’t rather get exactly what you want?

Finding resources can be tough, but remember to do your research. Ask each company what types of beverages they develop, what they specialize in. If you want to develop an energy drink, why would you work with a formula house that specializes in soda? There are so many different companies out there and you want to give your business to the right company for your beverage development.

I have a rule when doing business. Don’t do business whith someone you would not invite to your house to have dinner and meet your family.

Mistake #3: Failing to do research on the beverage industry market

The beverage market dictates what sells and what doesn’t. As with any market, there is a demand for products. If your product meets the demand, it will naturally sell and if your product does not meet the demand, you will not get sales. It doesn’t matter if you think your beverage is the best drink that has ever existed, if the market is not willing to accept it, it will not sell.

In order to safeguard yourself against putting time and money into a product, only to have it not make you any money, you must take the time to do your research on the market. Identify your beverage’s ideal customers; who are you trying to sell to and what do they want? Which beverages are selling and which aren’t? What is in demand? Is the market over-saturated with the type of drink you want to develop? Is there a new category of beverages emerging that you can develop a product for? These are questions you need to answer in order to be successful.

These beverage development mistakes can cost you months of time and thousands of dollars. Be sure to avoid these mistakes when developing a beverage and you can be successful.  Give me a call so we can talk about your beverage development project.

So remember:

  • Be the primary decision-maker in your beverage product development
  • Do your homework on development companies
  • Research the market

What will you get when you work with me?

  1. Expert Strategy and Consultation Sessions
  2. I will handle your project personally
  3. You will be a beverage development expert!
  4. Mentoring, not just task execution
  5. Unlimited phone calls and emails 7 days per week
  6. My personal cell phone number
  7. Beverage Development, Sales and Distribution Courses
  8. Audio courses on FMCG, Social Media marketing, and more

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