Growing Global: Universal Lessons in Beverage Development

In our almost 30 years in the beverage development business, Flavorman has enjoyed relationships with clients all over the world — from China, to the United Arab Emirates, Ethiopia, Canada, and many places in between. There are several reasons why Flavorman has achieved a global reputation as an industry leader in the beverage development space: we're not trend followers, but trend setters. We make client relationships a priority, and we use these relationships to be active drivers in our client's success. We are committed to changing what the world is drinking. That's why we have a proactive attitude toward engaging global markets and meeting international clients, quite literally, where they are.

Paired with our creative spirit, expertise, and tried-and-true development process, Flavorman is becoming even more engaged in the international market, helping entrepreneurs from every corner of the globe bring their dream drinks to life.

Discovering the next epicenter for beverage development - South Africa

Flavorman has always made it a point to stay ahead of the curve when it comes to the beverage business. Where are the global hubs of beverage development? What flavors, consumer insights, or regulations are shaping the beverage industry right now? How will this affect the next 5 years? These are just some of the questions we seek answers to when looking for the next beverage development frontier.

One way Flavorman keeps stride with the industry's biggest players is by attending beverage conferences and expositions around the world. That's because we recognize the value in having people on the ground in the places where we want to do business: we see every visit as an opportunity to build relationships, build our brand, and build on our expertise in flavors.

Recently, this search took Flavorman to South Africa.

Why South Africa?

South Africa has a long history in beverages — both in the alcohol and non-alcohol sectors. Its temperate climate is excellent for aging spirits and growing an array of raw materials, like those needed to supply beverage creation. In fact, South Africa boasts one of the world's most diverse agricultural sectors, with corn, wheat, sugar cane, citrus plants, and more all readily available.

Thanks in part to this abundance of natural resources, the country has the second largest economy in Africa (following Nigeria) with an elaborate infrastructure and a distribution network that easily covers the entire southern portion of the continent. This makes transferring goods, like raw materials and ingredients — as well as beverages themselves — quite manageable for small entrepreneurs and large corporations, alike.

In addition to readily accessible resources, South Africa is also home to a sophisticated wine-producing region called Stellenbosch, located in the Western Cape. But more recently, South Africa has seen an influx of small, craft distilleries popping up all around the country — more proof of its affinity for beverage creation.

With an exploding beverage market and emerging craft distilling movement — supported by a range of incredible, local flavors making their way into the next generation of drinks — South Africa offers an exciting avenue for establishing new beverage development partnerships. And the market is ready for them.

According to Statista, revenue in South Africa's Food & Beverage category is set to reach $82 million this year, with an impressive annual growth rate of 10.5%. If it follows this trajectory as projected, it could reach a market volume of $122 million by 2023.

These factors, along with the prospect of attending Africa's Big 7 Conference — the largest food and beverage conference on the African continent — motivated Flavorman to send our Relationship Architect, Matt Madden, on a visit that proved as fruitful as it was insightful. They say travel is the best way to gain perspective, and we've found this to ring truer with every trip we make.

Lessons for The Bush and beyond

On top of enjoying an unforgettable experience in one of the most beautiful places in the world, Matt extended his stay beyond the week-long conference to meet with beverage brands and craft distillers from Johannesburg to Cape Town, Stellenbosch, with lots of stops in between.

He returned from his voyage with a suitcase full of delicious souvenirs, a plethora of budding relationships and new projects, and some insights on how Flavorman can better serve our clients at home and abroad. Specifically, the trip reinforced two universal lessons for those looking to start their own beverage development journeys: the importance of knowing your market; and the need to choose the right partner when developing your dream beverage.

Matt Madden, Relationship Architect, Flavorman

Know Your Market.

It may seem obvious, but this is something we have to talk to our clients about all the time. After all, as any successful business owner will tell you, your ability to read and respond appropriately to the changing context of your chosen market will make or break your brand.

Take South Africa as an example. Spanning almost 500,000 square miles, "The Rainbow Nation" boasts one of the most diverse cultures in the world. For beverage entrepreneurs and developers alike, this creates obstacles as well as opportunities. Successfully developing a tasty beverage is one thing, but creating a product that truly resonates with your target market is another challenge entirely.

One way to establish a connection with consumers is through ingredients: make local flavors the stars of your beverage and it might help your drink stand out on a shelf alongside larger, more generic brands. There are a variety of native ingredients currently making their way into South African beverages — including bergamot orange, wild dagga, rose geranium, baobab, marula, spekboom, and warburgia salutaris — providing a range of authentic flavors that speak to the tastes of the consumers who call these regions home.

Another trendy ingredient in South Africa right now is rooibos, a broom-like plant with a smooth, gentle flavor, natural sweetness, and slightly nutty taste. While its leaves are often used to make decaffeinated herbal teas, beverage innovators have begun using it in creative ways, introducing it to gins, soft drinks, and other beverages for its taste and perceived health benefits.

Rooibos, meaning "red bush," also grows in South Africa's fynbos area — a small belt of natural shrubland vegetation located in the Western and Eastern Capes of South Africa. Not only does this make it an accessibly sourced ingredient for beverage entrepreneurs in the region, but its origin from this breathtaking landscape might inspire a meaningful brand story that can help you sell your product — yet another form of context that can be tapped in order to reach consumers.

Indeed, the most successful beverage brands are those with a compelling story that no one else has. Luckily, there are lots of potential sources for you to choose from when developing your own: What local histories, ingredients, or traditions are you paying homage to with your brand and your product? Everyone enjoys drinking beverages, but what is going to make consumers choose yours over something else? Understanding the context of your target market can help you answer these questions — and give your beverage development partner more direction when creating your custom drink.

Find the Right Partner.

You might think about choosing the right beverage development partner as another way of understanding context as described above — only this time, that means understanding what your beverage product's needs are, as well as your own needs as a business owner and brand builder.

For example, while South Africa offers a multitude of exciting opportunities for beverage development, it also presents its fair share of challenges. Half the battle is coming up with a tasty beverage formula with a brand and flavors that resonate with consumers; the other half is fighting for the right to get your dream drink on the shelf — and in this case, labeled appropriately.

For example, craft distilling is seeing an incredible emergence across the country, closely reflecting what's happening in the US. Like whiskey's increasing popularity in the states, gin is becoming the spirit of choice for South Africa, but there are regulation issues that threaten the sustainability of some brands entering the market.

Part of the problem is a lack of clarity in processes and category definitions which have led to gaps in both consumer and distillers' understandings of labeling and label requirements. According to the law, distillers are not allowed to use colors or flavor additives in spirits unless they are labeled strictly as "spirit aperitif" which typically comes in at a lower proof. Further, to be called a spirit aperitif legally, the product must contain at least 75 grams of sugar per liter, with few exceptions.

Because of this confusion, plenty of distillers have products on the market currently that do not meet these requirements — whether by accident or otherwise. Technically classified as illegal, if a product is discovered with an inaccurate or unlawful label, the producer risks having to recall their beverage from the marketplace completely — a prospect with the potential to kill the business.

To put it another way, if you're a beverage entrepreneur entering the South African market and your dream is to make a rum starring notes of rooibos, then you're not going to be able to call it "rum" or even a "spiced rum." Instead of removing the rooibos that makes you're product unique, you could make an effort to meet to the spirit aperitif classification — but you'd likely be forced to reduce your drink's ABV and increase its sugar content, further alienating it from the category you originally intended. In addition to straying away from your beverage vision, you may discover some extra marketing challenges, as it becomes more difficult to communicate the nature of your product to consumers set out on finding a new craft rum to try. It's frustrating, to say the least.

Between navigating unclear regulations, a persistent sugar tax, and uncertainty surrounding the continued legality of CBD across world markets, South African beverage entrepreneurs need a development partner with the expertise and creative prowess to come up with solutions to these challenges and more.

Luckily, Flavorman has experience dealing with these types of hurdles and can connect international clients to the information and resources required to be successful. Whether its finding reputable co-packers or navigating regulations to import and export ingredients, Flavorman partners with institutions like the US Commercial Service, US Small Business Administration, KY World Trade Center, US Import-Export Bank, USDA Foreign Agricultural Service, and US Embassies. Each of these relationships are critical to not only Flavorman's success doing business abroad, but also that of our international clients.

Changing what the world is drinking, together.

We've barely scratched the surface with all of the considerations you'll need to develop a stand-out beverage brand (you can find more on this in our COGS guide). But by illuminating these core principles — along with our own philosophy toward beverage creation — we hope we've provided you with some guidance as you begin to pave the way for your own dream drink. Wherever your journey takes you, we hope it includes us.

With over 60,000 custom flavors developed since 1992 and successful partnerships with hundreds of clients around the globe, Flavorman does more than just develop and sell custom beverage flavors. We provide unparalleled expertise, customer service, and added resources to help our clients be successful in any market they choose to bring their business. Working with clients around the world isn't just something we can do, it's something we want to do — and we do it very well.

Whether you're in Australia, Thailand, or someplace else, we'd be happy to work with you. When you're ready to change what the world is drinking, you know who to call.

Written by Matt Madden, Relationship Architect, Flavorman

If you've got an idea for a great drink, the beverage development experts at Flavorman can help you bring it to life! Just fill out this web form or give us a call at (502) 273-5214 to get started.

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