Published 15th October 2021 in Business In The News
We often meet entrepreneurs who believe that a new food or drink (F&B) brand can be started on a shoestring. Every business needs money to start and, believe me, the Food & Drink industry is no different. In fact, it can suck up a lot more cash than many other sectors.
Let’s review what it takes to develop a F&B brand, the professional expertise required, and the costs so you can bring your amazing idea to market.
A recipe made in a kitchen is unlikely to transfer to the factory. So, you’ll need a recipe developer to translate your mix into a simple 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 need to digest the Novel Foods regulations. You also need to know the health and taxation issues surrounding sugar levels. Your recipe developer can help with all of this.
Remember customers buy for health and return for taste, so it’s very important you get the best taste possible.
Decisions on packaging are crucial. Let’s look at the options for drinks: Glass, PET (plastic), 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. Glass is great until a wholesaler turns you down due to the weight of cases, or the unfortunate fact that 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 and costs. However, PET has lost popularity. Many buyers will only stock recyclable packaging.
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.
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 keeps the overall cost down with labels added later on. Easier to transport and with a two-year shelf-life cans are the least wasteful packaging option.
Your branding must educate your target market quickly, simply, 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 a designer with technical skills.
Your product must clearly and simply showcase its point of difference and advantages over the competition. This is much more important than your logo. Focus on what you want to tell your target consumer, not on the design you think is attractive.
Remember that 90% of a first sale is the branding. You can have the best tasting product in the World, but no one will pick it up from the shelf, so no one will ever know.
Website and Marketing Material
Getting your website right is important as it is your shop window to the world. In your product’s early days, it’s used mainly as a showcase to trade buyers looking into your brand. 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, then PR, Social Media and possibly online advertising. Everything adds up so allow a little more to cover the unexpected.
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. The successful brands you see will have used up a lot more than their initial investment before they came onto anyone’s radar.
With my own brand, which sold all over the world, the first five years saw any profit being immediately reinvested into marketing. But I made it all back plus a lot more when I sold it. Launching a new F&B brand can be a slow process but the long-term rewards can be great.