6 FAQs on Reformulation vs. Product Line Extension

If you're a younger company in the beverage industry, you've certainly learned by now that our market is constantly evolving and expanding. No matter how fantastic your drink is, a singular product may not always keep up with consumer cravings. Perhaps you want to create a non-alcoholic version of your ready-to-drink cocktail, or infuse a trending functional ingredient into your hydration beverage. This is where a reformulation or a product line extension may significantly benefit your brand!

As you consider the next moves for your beverage business, our Beverage Architects have answered six frequently asked questions we receive from clients when they're at the same phase as you:

1. What's the difference between a reformulation and a product line extension?

Understanding what makes a reformulation different from a product line extension is a great place to start. Simply put:

• A product line extension creates a brand-new product or SKU by adding an alternate version to your product, such as a new flavor or a sugar-free variant.
• A reformulation involves changing an element of an existing SKU rather than developing a completely new product.

Both projects are similar in that they build on your product's existing foundation and core concept, making the development process much more efficient than starting from scratch.

2. Why might I consider a reformulation or product line extension?

There are many great reasons why a beverage company might consider extending a product line or reformulating an existing offering.

First off, consumers love variety. When drinkers love a specific brand, it's easy to capitalize on their excitement by announcing new product releases or variations of their favorite products. Even as your business grows, you'll need to maintain market traction. Regularly introducing new products can keep current customers engaged while enticing new customers to try your drinks, increasing your opportunities to grow revenue.

For example, as consumers grow a taste for products that align with their wellness goals, functional ingredients, and lower alcohol consumption, a spirits or ready-to-drink cocktail brand might benefit from offering a non-alcoholic product line! Our laboratory can take your existing alcoholic product and, using our expertise in flavor chemistry, replicate it without the booze. Not only do you diversify your market share, but you also open the door to an entirely new segment of drinkers who can enjoy your products!

In other circumstances, reformulating an existing product may be the better option. There are many reasons a brand might choose to reformulate, but typically it's to improve the product in areas that align with its strategic goals. Those most common instances are:

• Consumers aren't accepting a product as intended, and the brand is getting a pattern of specific feedback. Perhaps the calorie count is too high, for example. This can be addressed by reformulating.
• The brand has decided to pursue a different consumer market requiring a parameter change. They might need to make their product comply with a specific beverage certification (e.g., Organic or Non-GMO) or a retailer's specifications (e.g., Whole Foods).
• The drink has become too expensive to produce, and an updated formulation is needed to lower per-unit costs.

3. Does that mean a product line extension will involve a reformulation?

From a development perspective, a reformulation and a line extension are easily distinguishable. However, a product line extension almost always involves an independent reformulation, but a reformulation won't necessarily indicate a product line extension.

Let's say you want to create a sugar-free version of an existing drink. To do this, you would still go the route of reformulating the existing "recipe" to exclude sugar. Now you can offer your product in the original and sugar-free forms - that's your line extension.

Of course, you could simply update the original SKU to the sugar-free formulation without extending the product line. You might have seen products labeled, "new recipe" or "now with 20% less sugar!" These are not line extensions, but simply reformulations of the same product.

4. What are the challenges for each process?

Depending on the complexity of the change, a reformulation or product line extension tends to be pretty straightforward. Of course, once you pull one thread, you have to unravel the whole thing and put it back together. Our Beverage Architects use their expertise to address the unique challenges this process creates.

For example, removing sugar is easy, but you still have to account for how it changes the beverage as a whole. Since sweetness carries a lot of flavor, a solution will be needed to replace that sweetener while maintaining the integrity of the product's flavor and overall formula.

This gets even trickier when you pursue too many changes to an existing formulation, especially with an already complex beverage. For example, functional ingredients, such as certain minerals or enzymes, can significantly affect the formula of your drink. One small alteration can throw off a delicate scientific balance, leaving you with a product that yields a different-tasting experience.

Ultimately, your Beverage Architects will assist you with any of these potential challenges and collaborate on creative solutions. Depending on your needs, you may also work with our state-of-the-art Flavor Laboratory to develop a customized flavor that blends seamlessly with your product's unique makeup.

5. How does each process work?

Great question, though the answer might surprise you! Both processes are remarkably similar to those of any other beverage development project.

You'll still need to make some decisions about what you envision for your reformulation or product line extension before getting started. As with any project, Flavorman will use your vision and specifications to map out the requirements.

If you've worked with us before, then we'll have the advantage of collaborating from an existing relationship. Both parties will benefit from already knowing what to expect, which can make the project more efficient.

If you haven't worked with Flavorman before, then no worries - our process is simple:

Through a series of sampling and tastings, Flavorman will move quickly through the development process. Your first set of samples will be promptly shipped to you so you can provide feedback to your team. We'll repeat this process until we get it right.

Once you tell us we've perfected your unique formula and flavors, our team will finalize everything and get it ready for production. We'll scale up your formula and create your blending instructions, complete label reviews, and submit regulatory paperwork. In the meantime, we'll also conduct quality and shelf-life testing to ensure your product consistently delivers a great experience to every customer.

6. When should I pull the trigger on a reformulation or product line extension?

As your business grows and more consumers have the chance to try your product, some hiccups are to be expected - that doesn't always mean you should pivot immediately! For example, you shouldn't consider reformulating in response to consumer feedback unless you receive a specific pattern or a high volume of negative feedback.

That said, there are other reasons you might want to reformulate, such as rising per-unit costs or an interest in entering a new market. These reasons may justify a reformulation, but it's up to you when to pursue it seriously.

As far as a product line extension goes, we usually recommend entering the market with two or three varieties of a product, usually flavors, before pursuing additional ideas. You may not want to release a product with 12 flavor varieties all at once! This may overwhelm consumers with too much variety too soon, and you may also run into distribution challenges.

Most distributors and retailers taking on a new brand won't agree to put more than one of your products (or a few, if you're lucky) on the shelf until you've proven sales. Once you begin to outsell your competitors, you'll be able to command more shelf space through product line extensions. And often, your distributors or consumers themselves will be the first ones to start asking for it:

One more thing to keep in mind - while Flavorman does have a reputation for being the fastest in the industry when it comes to speed to market, it can still take some time before you are ready to launch a product. If you're interested in exploring a reformulation or product line extension, it might be a good idea to discuss it with your Beverage Architect to understand the timeline you might be working with.

With over 30 years of beverage development expertise, Flavorman has created and reformulated every imaginable beverage. We're confident that by partnering with us, you'll have the best chance at success!