Published March 22, 2021 on Cumbria 24
The UK is brilliant when it comes to creativity and we’ve seen A LOT of innovation in the Food & Drink sector in recent years, writes Richard Horwell, owner of Brand Relations. Entrepreneurs in Cumbria have played their part in this. So, if you have a good idea for a new food or drink product you may be thinking of taking the plunge and starting your own business.
Having an idea is great, making something that tastes awesome in your kitchen is encouraging, but it is important to be aware of the fact that starting in Food & Drink is far from simple.
Let’s me share the 6 steps you’ll want to follow before taking your new food or drink idea out into the world:
First: Do your RESEARCH
We have so many clients that come to us with very little idea of the competition in the category they are planning to enter. The more established a category is – such as energy drinks – the harder and more expensive it will be to make any inroads.
Don’t just look in the UK, research the rest of the world. You can learn a lot from other brands’ mistakes and get some great ideas from the flavours they used. You can understand their messaging to their audience, how well they are selling in their market, and their retail price.
Second: POD (Point of Difference)
Think hard about your offering and why it will stand out. It is true that some small brands have become big brands and even taken on the likes of Coca Cola, so much so that the big players have spent millions to acquire them.
But to stand out from the crowd you must have a POD so that your target audience will cross the road to buy your drink. Creating a following is what makes your brand attractive to the big players to buy in the long term; they want your audience.
A point of difference is not just a funky flavour or more eye-catching packaging. It is being unique. Blending ingredients that others have not thought of before, and, making sure it tastes great.
Third: Get the funding you need
This isn’t a cheap industry to get into. One issue is the minimum runs for production. You can develop a production recipe (as opposed to one made in the kitchen), get a brand name and branding, and then try raising the money after that in order to pay for a production run. However, it’s virtually impossible to raise money just on a basic idea. If you have no seed funding to get started, then you may have to rely on family and friends to invest or donate, but this can be high risk and can potentially hurt relationships.
Think very seriously about where the money will come from. It can be up to two years before you make any. So, make sure you can survive and have enough money available to pay for adverts in wholesalers’ catalogues, sending out samples and possibly attending exhibitions.
It’s essential to have a clear financial budget for your business, whether you are self-funding or going to investors. The taste, the name, the branding, the distribution, the samples, the presentation pack for buyers all need to be spot-on from day one. That requires money.
FOURTH: Recipe development
Succeeding in making your drink at home doesn’t mean that it can be exactly replicated in mass-production. We work with several recipe development experts to help us source the ingredients at a competitive price and ensure they work together – resulting in a drink that tastes like the one you created in your kitchen but will suit your co-packer.
Some ingredients just don’t blend, this is a very specialised area and the recipe needs to be perfect. So, you will definitely need expert help. Any contract manufacturer will expect an exact recipe. And, for the packaging, you will need to know all the nutritional information for labelling.
One area that many entrepreneurs overlook is ‘Novel Foods’. The regulation on Novel Foods applies within the UK and the EU. If your ingredient falls under ‘Novel Foods’ you will probably need to pay for research to prove it is safe for human consumption. (See: https://ec.europa.eu/food/safety/novel_food_en)
Not all ingredients are allowed to be used in drinks and this is protected by Novel Foods, so you need to be sure that all your ingredients are in fact allowed to be used. This will save you time in the future rectifying any obstacles you could have tackled in the initial stages.
FIFTH: Packaging decisions
This can make a huge difference to your cost outlay.
For example, glass is the cheapest option as you can do the smallest production run. But, wholesalers dislike it due to the weight, and retailers because it may break. This makes it the hardest to sell.
Second cheapest is Hot Fill PET (plastic) which is small volume as the PET bottles can be filled with high temperatures. The negatives are that the bottles are ugly with solid ridges down them and with the backlash of PET polluting the oceans – these bottles have a lot of PET in them – consumers are turning away from this type of packaging.
Next is Aseptic Fill where the PET bottles are blown on-the-line, then filled in aseptic conditions to keep all the bugs out. After this the contents are pasteurised in the bottle, locking in all the nutrients. However, the minimum runs are massive as the factory needs to completely clean the entire line in between flavours.
Fourth is cans. These are very popular now, but minimum runs are high. For example, minimum runs for printed cans are 150,000 and minimum filling runs are 75,000. There are options to fill blank cans from as low as 12,000 volume and then sleeve them afterwards. It is a more expensive option but a far better way to test the market.
Fifth, is Tetra Pak but the printed runs of the cardboard are around 100,000 and need to be used up within a year. It’s a difficult option until you have the volume to justify it.
Last but not least is HPP (High-Pressure Processing), this is great for juices as the temperature is only 4C so it preserves all the goodness, antioxidants and flavour. The runs are small, but the cost is 10-15p per bottle just to put them in the machine as they use pressure instead of heat to pasteurise. The distribution must, of course, be chilled.
Understanding the best type of packaging for your drink and your target market is important – it’s a large part of your initial outlay so you want to get it right.
SIXTH: Your Co-packer (Contract Manufacturer)
These are the people that fill your drink in bulk. They are a very important part of the process and therefore you need to be careful who you choose to work with. Although there is a lot of choice in both the UK and EU, there are several companies that care more about making money than they do about making the perfect product. Then, there are the big players that just don’t care about start-ups. Do your research and make sure that the company you select has a good reputation – maybe speak to other brands they have filled? Also make sure they have the right certification as once you start to get listings, that question will be asked by retailers and wholesalers.
As I said at the start, the Food & Drink industry is not easy to enter. It is costly and you will need specific, expert advice. However, if you have a good idea start by doing your market research and go from there.