Why You Shouldn’t Start a Beverage Company

Why You Shouldn’t Start a Beverage Company

Should You Start a Beverage Company?

A few years ago I published the article Starting a Beverage Company, which covered the top questions that a beverage entrepreneur should consider before starting a beverage business. I received tons of emails with additional questions and comments from entrepreneurs.


It’s amazing how sometimes you can believe your idea so much that you forget to answer such basic questions as “Are there any buyers for my product?”


Every month we meet hundreds of entrepreneurs who are interested in launching their beverage startup. We start talking with them and sooner or later we find something that is obvious to us, but not to them.


For example, someone talked with his grandmother and she told him that his idea was great and that he should pursue it. Or, someone saw that Red Bull was a successful business, so they wanted to launch a similar product and fight Red Bull.


No, you shouldn’t. Don’t do it. You will waste your life savings and a ton of time; moreover, you will not succeed.

To make your life easier (and ours as well) I combined a list of things you should consider before starting a beverage company. If some of these fit you, then you shouldn’t start a beverage company.


The Challenges of Starting a Beverage Company

“I don’t have any budget. But I believe that once I share my idea with the investors they will understand this opportunity.”


It’s amazing how many people believe that you can launch a business without any initial investment. There is one essential thing you need to consider before approaching investors with only your idea. Why should an investor believe in your idea when you haven’t invested your money into it? You must show your commitment to your idea; moreover, you must show proof of concept before creating a drink product.. An idea is nothing – execution is everything.

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Remember, people invest money to make more money, so they evaluate every opportunity on many different levels: what is the product? Does that product has a potential to scale up? Who are the people behind the business? How much does it cost to start a beverage company? Are they capable of building that business? Do they have the know-how of beverage industry? They are not looking for ideas, they are looking for business opportunities.


“I want to outsource everything from A to Z. I also plan to have a full-time job, so I will need you to do the management as well.”


I love this one. Yes, we can help you from A to Z, but how can you expect to build a business and have a full-time job at the same time? Entrepreneurship is a full-time job with all the advantages and disadvantages.


If you don’t want to get your feet wet, then don’t start a beverage business.


“I gave a few samples of my drink to my mother and two friends. All of them loved it. I think this drink can be a huge hit!”


Actually, this is not so bad. You have already done some market intelligence and received good feedback. However, I don’t think it’s enough. You need to do your homework and get better feedback from the market. Is there the possibility to do a focus group or larger testing with people from the street?


Think about it creatively and don’t be limited by common knowledge. Tear down the walls. You need to be sure that people like the product. By having this answer you will feel more confident, which is huge.


“I know how to make a better tasting energy drink than Red Bull. I want to launch an energy drink brand and take Red Bull’s market share. They don’t have a chance.”


Yes, many other companies know how to make a better tasting energy drink than Red Bull. It’s not only about flavor of the product. Never was…

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“In my company I was doing sales, but at the same time I was responsible for launching a website and preparing brochures for exhibitions. So thanks, but I don’t need a Beverage Marketing Services. I know marketing quite well.”


If you believe that you only need “good packaging design” to succeed, then I will save you some time and money. No, packaging design is not enough. You need to have the full package, which includes your business strategy, tactics, brand, tone of voice, communication strategy, etc.


If you plan to talk with investors and approach them with only packaging design and without any clear strategy – you will fail. Be well prepared. Do your homework. Understand your consumer.


“I have noticed there are no similar products on the market. I want to launch as soon as possible, as it’s a huge opportunity.”


This one is tricky and you should approach it very carefully. In most cases you are not the smartest guy in town and there are already people who have thought about this idea. Before you start a beverage company, you need to find answers to these questions: Why there are no similar products on the market? Is there a market for this product? Is it a good time to launch this product? Did anyone tried to launch it before and failed? If so, why?


I think I have covered only a few of these ideas. However, the main goal of this article is to show one important thing: you must think very seriously before entering the beverage business (or any business). You need to do your homework and be well prepared. Is there the possibility of hiring professionals for hand holding?


If not – try to gather as much information as possible before making a huge commitment to this venture, which will require huge amounts of time, energy, and investment.


Believe in what you do!


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