Business

Written on August 18, 2021.

How much is a cup of lemonade worth?

While you might be tempted to go by the pricing set by the neighborhood kids and their summer stand, the truth is that lemonade happens to be a much more lucrative business in the commercial beverage world. According to a recent IndustryARC research report, the global market size for lemonade is currently worth a whopping $12 billion, and is projected to continue growth at a CAGR of 6.8% through 2025.

Supported by consumer nostalgia and continued hybridization of beverage categories, brands have gotten a lot more creative with this classic drink over the last few years. That’s right—lemonade isn’t just a combination of lemons, sugar, and water anymore. This childhood favorite has officially grown up.

Here are the 5 biggest trends in lemonade:

1. Classic—But With A Twist…

Sometimes, elevating a classic drink like lemonade only requires swapping out a familiar ingredient to create a fresh take. While the bright flavor of lemon continues to be a staple in the beverage world, consumers are increasingly seeking new citrus profiles and exotic pairings designed to add a little adventure to an otherwise traditional experience.

Substituting lemon with similar exotic profiles like Meyer lemon and yuzu can preserve the appeal of a childhood favorite while catering to a more premium audience. Meanwhile, introducing unique flavors like dragon fruit and prickly pear can complement the sour, bitter profile of the lemon with a subtle sweetness and added complexity.

There is plenty of inspiration to be found across the globe where traditional lemonade takes on many forms. Throughout North America and India, “lemonade” means exactly what you’d expect: a blend of lemon juice, sugar, and water (though the Southern US likes to add basil to the recipe).

Travel to Israel, Syria, Lebanon, Jordan or Brazil and your drink will be served with a flavorful addition of crushed mint leaves. However, if you order a lemonade in England, Ireland, Australia, or New Zealand, and you might be in for a bigger surprise. In these countries, “lemonade” refers to a carbonated lemon-lime soda (think Sprite).

The lesson here is that sometimes, sticking with your roots and keeping it simple works best. Spindrift is a great example with a whole brand built on simplicity and quality. Their new line of unsweetened lemonade comes in three flavors—lemon limeade, pink lemonade, and strawberry lemonade—with bubbles to emphasize the drink’s signature freshness.

 

2. Lemonade, Plus Premium Flavor!

We know better than anyone that consumers crave flavor. As the category continues to gain traction, beverage brands are introducing an array of innovative lemonade flavors to delight the tastebuds—and why not? Lemon and sugar tend to pair well with almost anything. Going beyond the staple lemonade flavors of the past, brands are taking the drink to the premium sector with sophisticated new combinations.

A minority-owned brand by teenaged entrepreneur Mikaila Ulmer, Me & The Bees recently launched two new flavors of its flaxseed lemonade at Target and Whole Foods stores around the country: Prickly Pear and Ginger. The flavors, as well as the drink’s organic, clean label formulation have helped dazzle consumers and present a feel-good way to fund organizations working hard to save the bees.

Another wildly successful lemonade brand, Calypso, packages their products in glass bottles and offers nearly 20 flavors in both full sugar and sugar-free versions. Unique flavors include Triple Melon, Cucumber Limeade, and Southern Peach. During the past few years, the brand has expanded internationally and nearly doubled in growth with increased interest in their no sugar options.

Flavor may be king, but texture matters too—and it happens to be a beverage quality that is gaining more attention as of late.

 

3. For Boba Lovers

Boba is a refreshing Taiwanese beverage that features round, chewy balls of tapioca. Also known as bubble tea or milk tea, the drink has quickly become a summer sensation in the US. Even while the industry experiences a shortage of boba balls and the tapioca starch from which they are made, brands are scrambling to deliver consumers their boba fix with lemonade.

Last summer, Del Taco—the nation’s second largest Mexican quick service restaurant—added Sprite Poppers (the lemon-lime soda brand, plus boba balls) to menus for a limited time. In March of this year, they made Poppers permanent, choosing to pair the chewy blueberry and peach-flavored beads with Minute Maid ZeroSugar Lemonade.

Dunkin’ restaurants recently announced their own roll out of “popping bubbles” to their menu. The bubbles, which only come in a strawberry flavor for now, can be added to any iced or frozen Dunkin’ beverage. Thanks to their fruity flavor, they reportedly have been a hit in complementing the chain’s coconut refreshers and lemonade options.

RTD brands have also taken the plunge, churning out novel pre-mixed boba products. Joyba Bubble Tea is an RTD brand featuring two flavors, including a strawberry lemonade green tea with boba, now available at Costco stores nationwide.

The move to pair boba with lemonade not only provides an approachable way for F&B brands to introduce the drink to Western consumers, but also to elevate an otherwise standard experience. This is especially critical as more people develop sensory disorders from chronic COVID. The industry has an opportunity to innovate and create more interesting drinks for sufferers of lost or distorted taste and smell by enhancing beverages with texture.

 

4. Make It Whipped

Boba isn’t the only drink texture consumers seem to be drawn to. TikTok—the app that recently hit a milestone three billion downloads worldwide—can be thanked for giving us the latest trend in lemonade.

Following the hype around the fluffy South Korean dalgona coffee in 2020, TikTok users started experimenting with other forms of whipped drinks, including lemonade. While it is difficult to pinpoint who can be credited for first circulating the viral “creamy lemonade,” there’s no doubt that it has since fascinated consumers who have rushed to try it out.

In an interview with TODAY, user @goldenxclouds said she was first inspired to make a version of the dalgona drink for non-coffee lovers like herself. Using a handheld frother, she combined a packet of pink lemonade-flavored Kool-Aid and heavy whipping cream, using the resulting fluffy mixture as a topping for a regular glass of store-bought lemonade. She described the drink as a “cool sorbet” or “lemonade creamsicle.”

Since then, other variations of the recipe have circulated, though it remains to be seen whether this is an innovation that can be prepared in a ready-to-drink form. A user called @mtlajeunesse shared a version that incorporates ice, whipped cream, sweetened condensed milk, and fresh squeezed lemon juice, blended together to form a creamy, sweet treat. Other takes on the drink use powdered lemonade mixes instead of fresh juice, or add ingredients like egg, coconut milk, fresh fruit, or alcohol—which brings us to our last lemonade concoction.

 

5. Lemonade, But For Adults

When life gives you lemons, add alcohol! Hard lemonade seems to be the next frontier for the hard alternative market. While not new to the beverage alcohol sector, hard lemonade has been getting more attention as big brands seek out additional avenues of differentiation.

A refreshing beverage in its own right, hard lemonade has grown up from the sugary and syrupy concoctions of the past. Modern adaptions of hard lemonade are now much lighter on the palate and waistline, prioritizing flavor and ingredient quality over sweetness.

Big brands like Truly and Bud Light released their collections of hard lemonade and many other beverage companies—big and small—have since followed suit.

The sweet spot in ABV and calories for these products tends to mirror that of hard seltzer, with most hard alternatives clocking in at around 5% ABV and 100 calories per can. Flavors also model many of those popularized by hard seltzer—think black cherry, peach, and mango.

Among the latest ingredient shortages at Starbucks, there’s no doubt that lemonade is trending. As more brands pop up on the market, make sure you’re doing what you can to set your beverage up for success. Like lemonade, the recipe is simple: bold flavors, quality ingredients, a unique twist, and the right beverage development partner.

Have a great idea for a new RTD lemonade? Flavorman’s team of experts can help you bring it to life and change what the world is drinking. Get started by filling out this form or giving us a call at (502) 273-5214.

 

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Written on August 11, 2021.

Take a moment and try to remember everything you threw in the trash this week. Go ahead, try it. Statistics suggest that at least 65 percent of your household’s trash came from packaging. Now factor in your neighbors. Your city. The state. The country.

If you can’t quite do the math on that, don’t worry, the US Environmental Protection Agency (EPA) has already done it for you. According to the EPA, Americans produce nearly 80 million tons of waste per year in packaging alone—the equivalent of 200 Empire State Buildings.

When landfilled or incinerated, it becomes pollution, waste that poisons the environment—that’s our air, soil, and water—and poses health risks to both people and wildlife. In fact, packaging waste is the number one contributor to plastic pollution in our oceans; at current rates, it’s projected to exceed the weight of all the fish on our planet by 2050.

Unfortunately, the Food & Beverage (F&B) industry is a big part of the problem—but there’s good news to be found here, too. As some of the largest contributors of packaging waste, F&B brands can play a huge role in making a difference; and truth be told, it’s also our responsibility to try.

The sweeping decision for brands to do away with plastic straws in 2018 was just the beginning. Consumer packaging in the beverage world spans everything from the rings around soda cans and bottles to the containers themselves, their labels and closures, as well as any materials by which they are shipped and stored.

Driven by rising consumer awareness of the impact of product packaging on ongoing environmental issues—like food and material waste, pollution, and climate change—sustainability has become a significant motivator for consumer purchase decisions.

Your beverage’s packaging should not only support your drink and business, but also take care to reduce any negative impact on the environment. Smart packaging decisions require thoughtful consideration of the various elements involved in packaging a beverage product as well as the sustainable alternatives that might be available to you.

Here are 3 approaches to achieving more sustainable drink packaging:

1. Choose the most efficiently recycled packaging materials.

Not all packaging materials are created equally. Take plastic for example. While all plastics are not necessarily recyclable, many utilized in the beverage industry can be. Plastics are assigned across seven categories based on their Resin Identification Codes (RIC), distinguished by the temperature at which the material has been heated. This numerical classification can tell you what type of plastic it is you’re dealing with—and whether it’s recyclable.

PET (or polyethylene terephthalate) bottles are clear, strong, lightweight and 100 percent recyclable plastic; however there is a limit to how many times this material can be recycled before degrading substantially in quality—two-to-three times before, to be specific. This happens because every time PET plastic is recycled, its polymer chain grows shorter, and even then, additional “virgin” material needs to be added to make it durable enough to go back into the market. In other words, “recycled” plastic may not actually be completely re-used material.

This is a big reason why other highly recyclable materials are considered much more sustainable drink packaging options. Glass and metal (usually aluminum) can be recycled indefinitely without sacrificing on quality or durability, and without adding additional virgin material.

Again, there’s always a tradeoff: where plastic is lightweight and durable, glass is heavy and delicate, making shipping a challenge. Cans offer a great balance of desirable qualities for drink packaging and sustainability, but there are ongoing supply chain issues that have (at least for now) made it difficult for beverage companies to obtain them reliably.

2. Dedicate some space on your label to educate your consumers.

At this point you should know that the type of packaging materials you pick does matter. The easiest products to recycle are generally those made from a single, recyclable material; of course, the onus still lies with the consumer to actually choose to recycle the product. This is where investing in consumer awareness and education can make an impact.

Brands can help things along by calling attention to the recyclability of their product’s packaging, and by putting in the extra effort to tell consumers exactly how to do it. In fact, it’s in their best interest to do so. According to Chicago-based Mintel’s Global Packaging Trends 2019 report, it is becoming increasingly common for consumers to request the ability to recycle, and they are interested in understanding how the recycling process really works. This is great news for beverage brands serious about making a positive impact.

The Coca-Cola Co. for example recently introduced the standardized labeling system “How2Recycle” across packaging for its DASANI products. The addition—which has also been utilized by other F&B brands such as Walmart, Target, Nestlé, and General Mills—is designed to both educate and encourage consumers to take advantage of the option to recycle a product’s packaging materials after use.

3. Leverage sustainability in your product’s marketing and/or brand.

Why not make environmentalism a pillar your brand is known for? Companies pairing sustainable drink packaging initiatives with thoughtful consumer education and marketing have found great success in generating meaningful change without sacrificing their bottom line.

Boxed Water Is Better was founded in 2009 with a brand identity completely focused on the company’s commitment to sustainability. As the name suggests, their mission is to offer the most environmentally friendly alternative to plastic water bottles on the market.

Their purified, mineral-free water is packaged in a 100-percent recyclable, almost entirely plant-based carton. The packaging also comprises 75 percent FSC-certified paper and 5 percent aluminum with a protective plastic film lining. Even their closure is plant-based.

Not only has the guilt-free box design allowed them to attract eco-conscious consumers to their brand while substantially reducing their carbon footprint, but it has also made shipping more logistically and financially efficient. For every 26 trucks required to ship plastic water bottles, only a single truck is needed to transport the same number of Boxed Water products. Everyone wins.

Whether you choose to utilize one of these approaches or all three, taking steps to provide more sustainable drink packaging should be a priority for any beverage brand—and it doesn’t have to be a detriment to your business! We hope we’ve shown you that you can change the world and change what the world is drinking.

If you’ve got a great drink idea, Flavorman can help you bring it to life! Get started by filling out this webform or by giving us a call at (502) 273-5214.

 

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Written on July 14, 2021.

In 2020, all of us were forced to give up a lot—social experiences, coins, baker’s yeast, even toilet paper. As vaccinations continue to roll out and we begin to feel a little safer again, the bad dream that was the worst of the pandemic is finally starting to fade away. Kind of.

For producers of the world’s beverages, the return of normalcy is taking a bit longer, primarily due to ongoing shortages and supply chain challenges. Cans are one such item that has yet to recover from scarcity, but the truth is that the can crisis has been going on for a while. If that’s news to you, then take a moment to explore the past and present landscape for sourcing cans, how producers and suppliers have been coping, and why COVID-19 has exacerbated the can shortage.

 

From Can Shortage To Can-demic

Let’s be clear about one thing—the raw material for aluminum can production is not in short supply; rather, it’s the capacity to produce the cans that’s lacking. As The Aluminum Association, an industry group representing metal manufacturers, said in a statement, “the aluminum beverage can manufacturing industry has seen unprecedented demand for this environmentally friendly container prior to and especially during the COVID-19 pandemic.”

Long before the start of the pandemic, increased demand was a key contributor to the can shortage. There are a few reasons for that. For one, cans have become a favorite among consumers prioritizing convenience. Cans are more portable and easier to store than the bulkier, heavier plastic or glass bottles. Environmental concerns have also helped drive preference for cans as they are a more sustainable and easily recycled option.

Beverage brands are equally enthusiastic about cans which offer a lightweight and reasonably priced packaging solution. Aluminum cans are also great at omitting light (unlike glass and plastic options) and they are effective in keeping out oxygen and maintaining CO2, making them efficient for longer shelf-life applications. It’s not difficult to see why beverage producers of all kinds are vying for them.

With the recent flood of RTD seltzers, cocktails, and the like, competition for cans has heated up faster than manufacturers could adjust to. Naturally, the shortage reached crisis levels in 2020 with the emergence of the global COVID-19 pandemic.

As lockdowns left restaurants and bars shuttered, consumers were forced to give up their usual fountain or tap fix. Instead, consumers turned to packaged drinks they could enjoy at home and beverage brands experienced a 180-degree shift from on-premise to off-premise sales. The demand for packaged goods of all kinds skyrocketed almost overnight, putting a further strain on can manufacturers that has since been slow to recover.

 

A Kick In The Can

So, how have beverage brands been faring? Well, to put it gently—it’s been a real kick in the can.

During the height of the pandemic, lead time for shrink-sleeved cans (where plastic labels are shrink-wrapped onto containers) had grown from 4-5 days to 4-5 weeks while printed cans doubled in price—and that was assuming you could get your hands on any at all.

In response, some of the world’s major producers were forced to rethink their supply chain to make the most of the cans they already had. Some brands made the hard decision to pull certain products to free up those cans for their more popular offerings—but at a cost.

Miller Lite owner Molson Coors Beverage Co. shared that it had lost some market share in the US, partly because it had to suspend production of some canned beers—an increasingly common story among other producers, big and small. In fact, the little guys have been hit particularly hard by ongoing can supply challenges. After pivoting to canning their brews due to a loss in foot traffic, local breweries and other craft producers found themselves competing to get their products packaged and in the hands of consumers.

And it wasn’t just beer brands feeling the heat. In the height of the pandemic, it was reported that Coca-Cola temporarily stopped producing 12-packs of Minute Maid Light Lemonade and other niche products so those cans could be used for their more iconic offers, like Coca-Cola and Sprite. Pepsi also acknowledged making similar choices in their supply chain to mitigate canning challenges.

Other producers with pre-printed cans adapted by affixing new labels or changing their packaging altogether, at least temporarily, to glass or plastic bottles. While the can shortage has eased up slightly since last year, it is by no means behind us. Many of these strategies and more will need to be kept close at hand until a more permanent solution can be established.

 

Adopting A Can-Do Attitude

While can prospects have been grim for a while now, all is not yet lost. Can manufacturers are already well on their way toward implementing a solution for the can crisis. Colorado-based Ball Corp., the world’s largest supplier of beverage cans, currently produces 350 million cans a day from its facilities; now, the company is investing more than $1.5 billion to increase this capacity to meet demand that CEO John Hayes says the industry hasn’t seen since the 1970s.

This investment will help Ball open two new plants in the US by the end of 2021, as well as add two additional production lines to existing US facilities. Another major can supplier, Philadelphia-based Crown Holdings, has followed suit with its own plans to increase capacity.

In the meantime, Ball, Crown Holdings, and others are ramping up production at foreign plants to assist with addressing supply challenges in the North American market. Of course, until these additions are up and running, it will continue to be a challenge for can suppliers to meet demand. Some suggest that, despite the unusual circumstances, maybe this shortage couldn’t have been avoided after all.

As Crown Holdings CEO Timothy Donahue put it, “Even without COVID, I think we would be capacity constrained as an industry. The market was always going to be oversold this year and we were always going to be trying to find cans to serve the US customers.”

So, is there an end in sight for this can-pocalypse? Yes! However, we’ll all need to be patient. In the meantime, beverage brands continue to do their best to find creative, innovative solutions for packaging as they hope for a more stable future for cans—fingers crossed that it comes sooner than 2023.

When you’re ready talk about your beverage idea, give us a call at (502) 273-5214 or get started with this web form.

 

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Written on July 7, 2021.

You’ve created a great-tasting and totally unique beverage formulation—that’s great! But now, comes the next hurdle: figuring out the best way to package and present your dream drink to your consumer. Of course, packaging isn’t just about serving up your product in an attractive way; it also involves taking care to protect the quality of your beverage, making it easy to ship and stock on store shelves, as well as ensuring that pertinent information about your brand and the product inside are communicated appropriately.

While most of today’s commercial drinks are packaged in plastic (PET) bottles, there are an increasing variety of beverage packaging types, shapes, and sizes available to choose from, each of which come with their own benefits and challenges. As you search for the appropriate packaging solution for your unique beverage formulation, there are a few things you’ll need to consider—here’s 6.

 

1. Explore Your Packaging Material Options

First of all, you’ll need to decide on how you want your beverage presented on the shelf—primarily, what kind of container you plan to package with. While there are a multitude of options available, you’ll need to balance your vision with the realities of cost and availability. You’ll also have to evaluate the compatibility of your choice with your drink’s unique formulation, processing, and labeling requirements.

The material type you choose matters because each affect variables like weight, sustainability, shelf life, shape retention, and resistance to temperature, among other things. We’ll cover three of the most common types, including plastic, glass, and metal, though you are encouraged to do your own research to find the best option for your product.

Plastic

One of the biggest benefits of plastic packaging is that it is easily shaped, lightweight, and durable—there’s a reason why plastic (PET) bottles continue to be one of the most popular beverage packaging options in the industry. Thanks to innovations, improved processing methods, and material enhancements, plastic can also handle pressurized liquids like carbonated beverages. The fallbacks of plastic include a shorter shelf life compared to glass or metal containers of the same size, and it isn’t as much of a sustainable option.

Glass

Glass is one of the oldest packaging materials still used in the beverage world. It benefits from a premium feel and high recyclability factor. Unlike plastic, it also is generally impervious to CO2 loss and O2 ingress, giving it a longer shelf life. Of course, there are still several notable tradeoffs; for example, glass is incredibly heavy and breaks easily, which can make shipping a substantial challenge, especially when secondary packaging (film wrap, paperboard, plastic carriers, etc.) is not adequate.

Metal

A majority of the world’s drink cans are made of aluminum. This material is lightweight and highly recyclable—and currently tricky to source in the desired can form. In fact, global cans shortages have created a real headache for beverage producers, so before you set your heart on metal packaging, understand the challenges you might face in stocking your materials. For some, it might be worth the hassle. Aluminum cans are great at omitting light, unlike glass and plastic options, and they are effective in keeping out oxygen and maintaining CO2, making them great for longer shelf-life applications.

There are also material costs to consider. Plastic bottles can range from 12 to 40 cents depending on the type (those accommodating special processing will be more expensive). Meanwhile, a 12-oz. decorated can will typically run about 15 cents per unit at average introductory order minimums, whereas you can expect to pay about 40 cents per unit for glass bottles.

You can cut your per-unit costs by purchasing or producing in higher quantities; however, both options will require a larger amount of capital which you may not have until your business grows. Other tips for reducing your COGS can be found here.

 

2. Select An Appropriate Co-Packer

Once you know what type of process and packaging your drink requires, you will need to find a contract manufacturer—also known as a co-packer—who is equipped to accommodate those needs and produce your beverage.

When selecting a co-packer, you should consider the following:

  • What are their processing capabilities?
  • What is their minimum production volume?
  • What types of packaging are their lines able to fill?
  • Do they have the proper licenses or certifications you require?
  • Do they follow current Good Manufacturing Practices?
  • Does the facility participate in an annual third-party audit? What do they score?
  • Where are they located in relation to your distribution area?

It is important to weigh the pros and cons of working with any co-packer and be aware of all the fees involved to make sure you are getting the most for your money. Finding a co-packer within close proximity is great, but only if other considerations ensuring the quality of your beverage are met.

 

3. Understand Your Labeling Requirements

Once you pick a container type, co-packer, and label application for your beverage, the next step is to obtain a template of the area in which the label artwork will go. Templates are generally supplied by the company where you buy your beverage’s containers.

Depending on how you’re going to apply the label to the container, there are different templates: they might be printed directly to the surface or on a wraparound label, shrink sleeve applied to the container, or by other means.

Different container types and label applications have different guideline requirements; so not only is it important to get the correct template when designing the artwork for your beverage, but you must also ensure your labels follow the guidelines associated with printing artwork on the specific container and label application you’ve selected.

Specific label guidelines address anything from how many colors can be used to how the barcode must appear, what file format the artwork should be delivered in, and so forth. The company that is going to print the artwork on the container generally supplies these guideline requirements—and remember, there will be cost implications associated with labeling your product.

Plastic or glass bottles will require an additional expense for creating and printing your product labels. If you plan to use cans, then your supplier will need to create a printing plate with your design, so add a few extra thousand dollars in up-front costs to your packaging budget.

 

4. Don’t Forget About Transportation Implications

Beverages are all perishable to some extent, so climate extremes, humidity, light, pests, and other environmental factors must be accounted for in your packaging—after all, packaging is the first line of defense for your product. Picking the right packaging involves being mindful to how you plan to transport and store your product.

When selecting your freight carrier, you’ll need to consider proximity as well as their shipping capabilities:

  • Does your finished product have to be refrigerated?
  • Can they be shipped on a bumpy rail car?
  • Are there concerns with pressure?
  • Does it make sense to produce in a certain location if you have to move your product so far?

If you are shipping a wine for example, you don’t want to let it go over a certain temperature—but things can get really hot on trucks. You’ve got the friction from the truck moving that generates heat, as well as the outside elements to worry about, and it’s typically not going to be an air-conditioned space. If it gets too hot, you risk corks popping and product spilling.

You run into the same problem if it’s too cold. Let’s say you’re shipping your wine from northern Minnesota. Instead of getting really hot, it going to be freezing. That’s why it might be best to ship on refrigerated trucks which will keep your product at a stable temperature, no matter what the outdoor conditions may be—but again, that is going to have a higher cost.

 

5. Choose The Right Warehousing Solution

As with transportation, there are several considerations to be aware of when picking a warehousing or storage facility:

  • Are they temperature controlled?
  • Are they moisture controlled?
  • Do they stack product?
  • How often do they inspect the facility for pests and mold?
  • Do they inspect your product on a regular basis?

If you’re not careful, the conditions in which you store your product can impact the quality of your beverage and cost you in the long run. For example, placing product in a hot warehouse may speed up the aging of your beverage and significantly affect its shelf life; or an overly humid warehouse may corrode your beverage’s packaging. Overall, letting a product sit without inspection might allow any number of small problems turn into big ones.

 

6. Work With The Right Partner!

As you can see, there are many factors to consider when looking into beverage packaging, as well as related concerns like transportation and warehousing. By choosing to work with beverage experts like Flavorman, you’ll not only expedite the process of finding solutions for your business, but also be saving yourself a headache later by ultimately reduce your risks.

Flavorman can set you and your product up for success. With nearly 30 years in the business, Flavorman has created almost every kind of drink imaginable—and we’re confident that we can perfect your dream beverage, too.

“Other development companies or flavor houses will give you a formula and flavor and send you on your way,” says Kristen Wemer, Flavorman’s Director Beverage Architect. “They don’t provide any technical or regulatory support. Flavorman is different. Even after your formulation has been finalized, we continue to be an extension of your team. That’s what makes us so unique and that’s what makes our clients—and their beverages—so successful.”

When you’re ready talk about your beverage idea, give us a call at (502) 273-5214 or get started with this web form.

 

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Written on June 30, 2021.

Creating a successful beverage business involves more than a great idea. The reality is you’ll need a few key partners to bring your dream drink to the masses. 

You’ve worked with a beverage developer to create your custom formulation, secured your ingredients and packaging, and found a manufacturer to produce your drink—the next step is mapping out your route to market. So, how do you get there? 

Whether you’ve got an alcoholic or non-alcoholic product, you’ll want to find a distributor. Distributors are partners that help brands connect and sell their products to the right retailers—that’s everyone from convenience and grocery stores to restaurants and bars.

Though each has their relevance in the beverage industry, not every distributor is the same. Finding the right distributor means understanding the distribution landscape, knowing what to look for, and how to set yourself up for success. 

In this guide, we’ll explore the nuances involved in working with an alcohol distributor, specifically. Alcohol distribution is a complex and highly regulated space, so we hope that this expert piece gives you a head start in working through some of the many considerations involved in launching an alcohol product.

 

Understanding Distribution: What Is It?

Distribution is all about relationships. From a topline view, a distributor (or wholesaler) serves as an extension of the sales arm of beverage brands (called suppliers). When a partnership agreement is reached between a supplier and wholesaler, the distributor takes on the responsibility of introducing and selling products to retailers. At the same time, a wholesaler works with the supplier to build a brand consumers return to time and time again.

In addition to being a steward of the brand, a distributor serves as tax collector for the supplier side and pays state and local taxes on behalf of the brands they represent. This frees up the supplier from the role of ensuring the tax code is met in each specific state and locality in which their product is served.

Beyond that, large distributors like RNDC can also act as a full-scale resource to their supplier partners—this is where the brand-building element comes in. It’s in a distributor’s best interests to consult with suppliers on sales, marketing, and strategic planning and provide support to help them be successful.

 

Alcohol Vs. Non-Alcohol Wholesalers

The simplest way to summarize the differences between an alcohol and non-alcohol distributor is the product. But naturally, there are several associated legal limitations that go along with distributing alcohol versus non-alcohol products. 

For one, alcohol distributors experience a degree of federal oversight that non-alcohol wholesalers aren’t necessarily subjected to. Unlike non-alcohol distributors, federal oversight of alcohol wholesalers extends beyond the product development phase, affecting everything from funding and label creation to compliance within the nuances of state and local laws.

Another key difference based on the nature of the product is that non-alcohol distributors can serve most retailers, whereas an alcohol distributor can only sell to licensed premises. Of course, many alcohol wholesalers also carry a number of non-alcohol brands whose intention is to be sold with alcohol. This can be beneficial for cross-merchandising and planning programs for retailers to carry multiple complementary products from a distributor’s portfolio.

 

Contacting An Alcohol Distributor

If you’re reading this, you’re either exploring the possibility of launching a beverage company or you’re in the midst of developing your drink and brand—when should you contact an alcohol distributor?

Well, when you’re ready. 

Depending on who you ask, this can be defined in a few different ways; at the very least, you’ll want to have a crystalized concept and viable business plan. A wholesaler needs to understand enough to be able to see how they would take your product to market and be successful doing so. 

A supplier might feel ready to have these conversations as early as two years prior to releasing the product, or in as little as several months leading up to a launch. What matters isn’t necessarily when the conversation happens, but whether the supplier is prepared.

First impressions are everything. The reality is that a distributor and supplier’s first meeting together is the pitch. It’s the interview where both parties have the opportunity to sell one another on why they would make great partners.

 

Acing Your First Alcohol Distributor Meeting

Okay, you’ve determined that you’re officially ready to meet with a potential alcohol distributor—what should you bring with you?

This is a wholesaler’s first experience with you and your brand, so you should bring a presentation. Make sure to include answers to questions like,

  • What’s your backstory? 
  • What got you involved in the brand? What’s going to keep you involved in the brand?
  • What is your brand vision and values? 
  • What plans or innovations do you have for future growth?
  • And of course, what is your product and what makes it unique? How does your product fit in the market?

Remember—distribution is all about relationships. A wholesaler wants to know as much about you as they do about your brand and product. You are who they will be working with, and they want to make sure that you will be a good fit in a partnership—that everyone’s values and expectations are in alignment so both parties can be successful.

In addition to a presentation, it goes without saying that you should have samples, as well as the spec sheets for your product. A distributor should be able to experience your brand the same way a retailer or consumer would. Give them the opportunity to taste, touch, and see it—to use all of their senses to fully understand the product and your brand. 

As a wholesaler assesses your product, they will also be determining its quality and quality-price ratios, in addition to benchmarking it against other products in their portfolio to determine whether it makes sense for the relationship. Keep this in mind as you prepare your presentation—your craft gin isn’t just another gin, so, prove it. Leverage your story.

 

Picking The Right Alcohol Distributor

Wow, you’ve impressed your distributor. That’s wonderful! Now, how do you determine that they are the right fit for you, too? There are three main elements that can help you make a decision. 

First of all, find out if they are relevant in the market—specifically, your market. Go to your desired retailers and ask around. Find out who they enjoy working with and why. After all, you should want to partner with the distributor that retailers want to work with. That’s already an easy way to set yourself up for success.

Second is route-to-market strategy. This is a primary responsibility of your alcohol distributor, so naturally, you’ll want to make sure your expectations are in alignment. Are they receptive to the direction you’ve envisioned for your brand? What can they contribute to bringing that vision to reality? 

A distributor should both be willing to work with you on where you want to go with the brand and be equipped with the resources and relationships necessary to do so. Not every brand makes sense for every distributor, and that’s okay.

This third consideration goes back to understanding the distribution process. A great wholesaler manages to balance multiple brands within the same category and avoid conflicts of interest. It’s a juggling act, but there is a place for most viable brands in the market. 

That being said, while a retail establishment often has more space on the shelf for a given category, a bar or restaurant may be limited in that same real estate. Knowing what competitive products an alcohol distributor carries can help you determine how often your product might be put aside in favor of another, competing product in those circumstances.

 

Building A Successful Partnership

A relationship between a wholesaler and a supplier is like a marriage—it’s a true partnership. This is also why setting expectations together is an important part of building a successful relationship. 

An alcohol distributor is there primarily to break down a supplier’s barriers to market. Often that involves working with each retailer and assessing what makes sense for them to carry, providing good data for them around a product, and helping them successfully build a product into their store.

On the supplier’s side, a great partner is expected to be engaged with their distributor. That means picking up a phone and checking in, planning business together, walking through marketing strategies, and utilizing the wholesaler’s resource teams. It also means having reviews to follow up and ensure plans are coming to fruition as expected.

 RNDC utilizes a “work-with” schedule, where suppliers have the opportunity to venture into the market to present that product with the sales team to retailers and customers. Not only does this educate the sales team, but it also creates a personal relationship between the supplier and retailer. This is incredibly valuable because the best suppliers are those that are engaged with their market and their wholesaler relationships. 

Beyond engaging with a distributor so they can be effective stewards of the product to retailers, a supplier is responsible for the consumer side of brand building. As a supplier, you should know the answers to questions like,

  • How do you plan to market your product and brand?
  • What kind of digital presence will you have? What about events? Where else can you reach your target consumer?
  • How will you drive people to the store to buy your product?

Once a product has been placed with a retailer, how do you make sure consumers know that, or even care to seek it out? That’s your job, as the supplier. 

Of course, passion for your dream is what got you into this industry, so sharing your story with the world should come as second nature. While the other aspects of creating a beverage may be a challenge, the good news is that you don’t have to do it alone. Take the time to educate yourself and find the right partners, and you’ll discover the flavor of success—your drink.

When you’re ready to talk about developing your beverage idea with Flavorman, fill out this web form or give us a call at (502) 273-5214. Let’s change what the world is drinking, together. If you want to learn more about RNDC, visit rndc-usa.com.

 

About Republic National Distributing Company (RNDC): RNDC is one of the nation’s leading wholesale beverage alcohol distributors, specializing in wine and spirits. RNDC serves as a brand-building and product expert liaison between suppliers and those who sell or serve alcoholic beverages. Customer service, product expertise, and executional excellence are the hallmarks of RNDC’s enduring success. Visit rndc-usa.com to learn more.

About Casey Cline: Casey Cline is the Division Manager over the Portfolio Management Team at Republic National Distributing Company, Kentucky. He has served with RNDC for 15 years, managing each element of the business, including off- and on-premise sales. He now manages all brand teams.

 

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