What do you need to budget when developing a new food or drink brand?

By Richard Horwell, Brand Relations

When considering the possibility of starting a business many people look at the Food & Drink sector as a starting point.

Some people have a genuinely innovative idea. But what will it cost to bring to market?  It is all too common to believe that you can start up your own drinks brand on a shoestring. Understanding the costs and the budget you’ll need is vital.

Let’s look at what’s involved and the professional expertise you’ll need to support you.

A recipe for mass production

A recipe made at home will be unlikely to transfer to the factory. So, you must find a recipe developer to translate your mix into a simple great tasting recipe for mass production.

You also need to take into consideration, for example, the nutritional information required on the packaging, and the legality of the ingredients. Not all ingredients are allowed so you’ll need to digest the Novel Foods regulations. You also need to understand the health and taxation issues regarding sugar levels. Your recipe developer can help with all of this.

Which type of packaging?

Deciding on the packaging is crucial. For a drink, for example, you can consider: Glass, PET (Plastic Materials), Cans or Tetra Pak. 

Glass is cheap to produce as it can be filled in small runs because the material can cope with high temperatures of pasteurisation. But it is heavy, and glass often breaks in transit or in store, and isn’t ideal for mail order. 

There are three types of PET (plastic) packaging, Hot fill, Aseptic and HPP (High Pressure Processing) which have different characteristics suiting certain types of product, and different costs.  However, PET has lost popularity since the campaign against single-use plastic packaging. Many buyers will no longer stock anything other than recyclable packaging. 

Cans. With 75% of the world’s aluminium now being recyclable, cans are the most popular format of packaging. They are available in a variety of sizes and with can be filled in runs as low as 1000ltrs. Filling blank cans to keep the overall cost, down as the can be labelled later on. They are much easier to transport and with a two-year shelf-life are the least wasteful of all the packaging options. 

Tetra Pak. The advantage of this packaging is that it comes in a variety of shapes and sizes, but the downside is that it is VERY expensive with the minimum run being 100,000 units per flavour.

Focus on the brand

Your branding absolutely must educate your target market quickly and clearly. A beautiful eye-catching design is pointless if it doesn’t tell your consumer what s/he needs to know.  That’s why you need a brand consultant with the requisite knowledge rather than simply a designer.

Your product must clearly and simply showcase its point of difference and its advantages over the competition. This is much more important than your logo. So, focus on what you want to tell your target consumer, not on the design you think is attractive.

Always remember that 90% of a first sale is the branding. You can have the best tasting product in the World, but without good branding no one will pick it up off the shelf, so no one will ever know.  

Your shop window

Getting your website right is important as it is your shop window to the world. In your product’s early days, it is used mainly as a showcase to trade buyers looking into your brand, but once you launch to consumers it will also need to be your online shop. It is an important tool that will help generate online sales and explain to customers why they should buy into your brand. 

In addition, you’ll need to budget for sample boxes and other marketing material – with some leeway to cover the unexpected. 

You’ll also need to budget for Social Media., PR and possibly online advertising.

The budget

Recipe development, packaging, branding, website and marketing to take you to the launch will easily cost you in excess of £35,000. Once you launch then there will be additional costs to consider and don’t be fooled into thinking sales will fund these – in the short-term that is very unlikely. 

With my own brand, which sold all over the world, any profit went straight back into marketing for several years.  However, I made it all back and a lot more, when the brand was sold. Launching and developing a new food or drink product takes time but with care it can be a profitable venture.

ABOUT THE AUTHOR

Richard Horwell is the owner of Brand Relations, a specialist food and drink marketing and branding company based in London. Over the last 13 years, Brand Relations has been behind the launch and development of over 100 brands in the UK. Richard has also built up and sold companies of his own in the Food and Beverage sector. He has over 30 years’ experience in marketing FMCG brands around the world, having lived and worked in the UK, USA, Australia and the Middle East.

www.brandrelations.co.uk

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