Routes to market for your new drink business

22 May

When you’re planning your new drink business, a key question you should be considering is how you’ll get your drink to market. Here, we’ve outlined some of the routes to market you should consider - starting from easiest, to most challenging.

1. Markets, festivals and events

If you’re looking for some feedback and face-to-face interaction with potential customers, then markets, festivals and events are an ideal way of getting your product out there.

First impressions count. Make sure your staff are passionate advocates of your brand and can talk about your business in a positive, enthusiastic way. The benefits of doing markets, festivals and events includes:

Exposure to potential customers
Real time feedback
Sometimes cheaper to do - however certain events can be very expensive and difficult to make your money back on!
Tailored experience and a good to chance to build up loyalty with your customers

2. Ecommerce or Direct to Consumer

Once you know your drink is a winner, you should invest in a website. This gives you the capacity to sell directly to customers. Consider options like: package deals and subscriptions. Also make sure you get an email mailing list set up to capture details of your first customers.

Here you can also consider expanding into marketplaces like Amazon. Some things to note about ecommerce or DTC are:

There’s potential liability in relation to returns, deliveries, timings, customer care but you can skip the middle man and get higher margins
You can set up an online storefront using something like Shopify, or sell on Amazon with physical fulfilment taking place at third party logistics (3PL) and/or fulfilment centres
If selling bulk/cases to consumers you may want to consider branded packaging, but that will eat into your margins

3. Wholesale/B2B

When you set up your ecommerce website, you should include information for wholesale customers. This shows them that you’re ready to take their enquiries and want to work together. Some important considerations are:

Your wholesale offering may overlap with retail/ontrade etc
You’ll be selling bulk product which is great, but you’ll have lower margins, compared to D2C

4. Distributors

At this stage, you’ll need to show there’s demand for your products. Some important considerations are:

Fees vary per distributor but they can potentially get your drink into other markets or sectors
They may charge a fee or higher take higher margins as a result so worth considering on a case by case basis depending on where you’re at in your journey

5. Off-trade / small-scale retail

For example farm shops or small indie bottle shops. There’s less of a supply chain process and tends to be the kind of business where you can walk in and speak to the owner or manager face to face.

You can talk to the people who work there to understand their customers. This could be a great opportunity to do an in-store tasting event.

The potential downside of this route to market is that it’s time intensive and means spending time building relationships. The relationship might die as you business scales because if you move into a big retailer, then the small scale retail can’t compete.

6. Retail

Retailers have limited shelf space, and again, will want to see that there’s demand for your product. The things to know are:

There’s potentially limitless volume and reach
However there’s much tighter margins, logistics and timings
You should have a solid operational base if you want to go into large scale retail
Payment terms might not be friendly with new businesses as you may be looking at up to 90 day payment terms
And they may undercut existing accounts if the price is driven too low

7. On-trade

Building relationships with venues can help you with this challenge. Not all venues are created equally - certain venues can only purchase goods through approved suppliers. This might depend on the size of the venue.

Getting approved by these suppliers (Bidfood, Mathew Clark etc) might be slow and difficult but if the venue really wants your product, you can often use that to speed up the process and potentially get into other venues as a result.

Small-scale on-trade choose what they stock and where to buy it from, such as indie, family owned bars and restaurants. This can be time intensive and require relationship building, as well as possibly training staff on serving your drink in the best way possible.

You get great insights about what customers are saying, price point and serving ideas. However, you might lose that once you scale.

It’s clear there are plenty of ways to get your drink to market and hopefully you will be utilising all them one day! However, it’s usually best when you’re still small, to focus on a few of the smaller and lower-stakes options. Do a few things well rather than a lot of things badly! Learn your product, your selling points/USPs, strategy and then go for world domination.

While all of these steps might sound daunting, it goes without saying that you’ve got The Start-Up Drinks Lab to support you all the way. Get in touch about working with us on your drinks business.