Creating an alcoholic drink is likely to cost around £50k – at the very least. You also have to have enough funds for HMRC to believe in you. If you plan to start trading in alcohol you need to be approved by AWRS (Alcohol Wholesalers Registration Scheme). You cannot sell alcohol in the UK without this registration and if you look like a tin-pot business they won’t give you the time of day.
You also need to be prepared to spend a lot of time on the project. Launching a product in the drinks industry is a long, slow journey. It is always the dream of a new brand to have an instant success, and there has been a lot of innovation over the past ten years where some small brands have indeed been snapped up by the big players. But while it can happen, it is rare, as most brands don’t stand out enough to make a real difference. It took me several years to get traction with my alcohol brand, without any income, but in the long run I sold it to a very wealthy Dutchman, making it all worthwhile.
Here are a few tips for navigating what is an extremely difficult, fast paced, often fickle and hugely expensive path.
Research, research, research … and then do a bit more research
Know your target market and research it thoroughly. Drinkers over the age of 35 are unlikely to change their habits and younger drinkers between 20-35 tend to have a sweeter palate and will be looking for more modern flavours.
Is your idea unique? Is there a need for it? If it isn’t unique, why would you expect to knock a competitor off the shelf to make way for your product? It’s not going to happen. You need to stand out from the crowd.
Ask yourself if your product is the one your target audience will cross the road for, and don’t just limit your research to the UK: you need to think global. Any similar, well-established brands overseas will easily be able to blow you out of the water.
Think about the future
At the moment, only soft drinks, by law, have to declare the ingredients on their drinks. But times are changing. Consumers don’t want to spend all week looking after themselves and taking care over what they put in their bodies only to undo all that good work with a few drinks on a Friday night. I believe that alcohol is a massive contributor to obesity in this country. And while no-one in their right mind would ever suggest that alcohol was healthy—neither is Coca Cola and that has to list its ingredients—so it would be wise to understand that people are reading labels more. Tapping into the healthy market is the way forward. Many well established and historically successful brands will suffer hugely when the time comes to make ingredients available to the public. Stay ahead of the curve and don’t use cheap ingredients now for a quick win.
It’s tempting to give away samples to entice people to stock and buy your product but there are sound reasons not to do this. You will still be paying tax to HMRC on anything you don’t sell so you are instantly making a loss and you definitely can’t give out samples on the street because of the chances of it falling into the hands of children. There is also a tendency for people to say they like anything that they are given free of charge but when you ask them to put their hands in their pockets that’s usually a different matter. People are going to be far more critical of something they have to pay for, and you will find with focus groups that after half-an-hour they will say anything just to go home. Better to come up with a strong marketing plan that centres around knowing your audience.
Also give careful thought to packaging. Glass is cheaper but wholesalers hate it because of breakages. Smaller cans with less duty are the most price appealing. But what appeals to your target consumer?
Creating an alcoholic drink is tough. Only one in ten new alcohol drinks business ventures will survive beyond two years so you need to make sure you have done everything possible to be in that winning ten per cent. Remember, the sale of alcohol is far more restrictive in the UK than anywhere else in the world and yet it’s the most saturated market.