Last Updated on April 30, 2024 by Troika Gellido
Thinking about diving into the beverage industry? It’s an exciting and dynamic field, ripe with opportunities but can also be quite competitive. With the market constantly evolving and consumer preferences shifting, it’s crucial for new entrants to carve out a unique niche and deliver value that stands out.
This article is crafted to guide you through the ins and outs of starting your own beverage business, with a special focus on the critical early steps. We’ve pulled together some stellar advice from a Legends Behind the Craft episode with Chris Tunstall, co-founder and Chief of Brand and Product Development at A Bar Above. Check out his pro tips on starting in the beverage industry as a budding entrepreneur.
1. Do Your Homework
Before taking any concrete steps, it’s imperative to conduct thorough research. Understanding the current market trends, consumer behavior, and potential competition will provide a solid foundation. Develop a comprehensive business plan that outlines your business model, market entry strategy, and financial projections. This document will be vital not only for guiding your business decisions but also for securing investors or loans if necessary.
Chris Tunstall, Co-Founder and Chief of Brand and Product Development at A Bar Above, advises budding entrepreneurs to: “Lay out the business plan, really figure out how you’re going to make money. How are you going to go to market? What advantage are you bringing to the table that doesn’t exist? Or what’s that space look like for you?” Thorough planning and market research for aspiring entrepreneurs in the drinks industry is vital.
2. Identify Your Unique Selling Proposition (USP)
In a market flooded with options, your product needs to offer something distinctive. This could be a unique flavor profile, innovative packaging, sustainable practices, or a compelling brand story. Determine what sets your product apart and ensure it resonates with your target audience. Your USP will be crucial in convincing consumers to choose your product over established brands.
3. Learn On Someone Else’s Dime
If you’re new to the industry, gaining experience on someone else’s payroll can be invaluable. Working in the hospitality industry, for example, can give you insights into customer service, operational logistics, and the financial management of a drinks business. If possible, aim for a managerial position where you can learn the ropes of business management within the safety net of employment.
In line with this, Tunstall also noted: “Learn as much as you can on somebody else’s dime too. If you’re in the hospitality world, become a manager. Really understand the business side of running a company. The numbers, the finances, all of it.” Gaining experience and knowledge while in employment can significantly reduce the risk when starting a new venture.
4. Understand the Regulatory Landscape
The drinks industry is highly regulated. Familiarize yourself with the necessary licenses, health regulations, and federal and state laws that will impact your business. Compliance is not just about avoiding legal pitfalls; it also builds credibility and trust with your customers and business partners.
5. Network and Build Relationships
Building strong relationships with suppliers, distributors, and other industry professionals can provide you with valuable insights and open up new opportunities. Attend industry conferences, participate in trade shows, and engage with online communities related to your business. Networking can also lead to beneficial partnerships and mentorship opportunities.
6. Prepare for Challenges
Starting a business in the drinks industry comes with its fair share of challenges, from supply chain issues to changes in consumer preferences and economic downturns. Prepare contingency plans and maintain a flexible approach to business strategy. Resilience and adaptability are key traits that can help you navigate through tough times.
Tunstall had a fair share of challenges when he was still learning his craft. In a Legends Behind the Craft episode, he shares that learning from past business attempts that didn’t scale well can help with the learning curve involved in entrepreneurship. He says, “So I didn’t really understand the idea of scalability…That was a really good lesson to learn.”
7. Commit to Continuous Learning
The beverage industry is dynamic, with new trends and technologies constantly emerging. Commit to lifelong learning to keep up with industry innovations and enhance your business operations. Whether it’s taking courses in mixology, attending webinars on business management, or reading up on market research, staying informed is essential.
As for Tunstall, he believes in the value of mentorship and learning from others’ experiences: “Really find people that are doing interesting things, learn from them as much as possible. If you could get a mentor, get a mentor. Really, really, mentors have been huge for us in our company.”
Starting a business in the drinks industry requires more than just passion—it demands careful planning, strategic thinking, and a deep understanding of the market. By following these steps and continually adapting to the environment, you can increase your chances of success and make a mark in the world of beverages.