How to Start a Beverage Manufacturing Company
Beverages as a drinkable commodity always have high demand because of the type of refreshment it gives to people after consuming it. Beverages can be alcoholic or non-alcoholic, and everybody has their own choices to make.
Therefore, for you to go into the business of Beverage manufacturing, you must have enough experience in beverage production. It is either, you have work in a beverage company for some years or you have enough capital required to start the business and needs to research on it.
Beverage industry is a grown sector, which also comprises of companies that produce or market alcoholic and non-alcoholic items. Many players in this industry have also diversify into profitable distribution arrangements in order to boost their operations, geographic area and product portfolios.
Meanwhile, beverage industry offers many types of drinks, which includes:-
- Alcoholic beverages
- Health drinks
- Energy drinks
- Coffees and Teas
- Sparkling waters etc.
So, you have to consider which one you want to do and do appropriate research and analyze the competition effectively.
However, some of things you have to think about when venturing into a beverage business are:-
- Inspiration and Opportunities
- Business Plan
- Procedures and guidelines
- Costs Involve
- Potential Incomes and
- Industry Contacts.
Registration and Licensing of the Business
Registration of business has always been bestowed on Corporate Affairs Commission in Nigeria. You have to register your business with this commission by requesting for the services of a good Consulting firm to help you sort out the registration processes in accurate way.
However, you have to know that every business in the beverage world has different laws and regulations; therefore, before you unveil your beverage manufacturing company, you will need to look into what type of license or permits you have to collect. For instance, Liquor license, Vendor’s license, Standard Organization of Nigeria (SON) license, Federal Ministry of Industry, Trade and investment; as well as the license issued after the inspection of Department of Public Health to your company.
Also, you have to register for tax purposes and obtain necessary insurances for your business and your employees. However, some of the insurance packages in relation to beverage manufacturing company are:-
- Workers Compensation Insurance
- General liability Insurance
- Commercial Auto Insurance
- Liquor Liability Insurance
- Property Insurance
- Bonds etc.
And lastly, which is very important as well as registering with NAFDAC. Getting NAFDAC registration number gives your brand a better acceptance in the market. However, before you can be registered by NAFDAC, they will first of all inspect your factory by sending their inspection Directorate and when they are satisfied with what they see, they will issue you Certificate of Recognition as a manufacturer of beverages.
You need to also know that, starting a beverage business will not expose you to much rules and regulations that other types of business. But it’s the manufacture and sale of that products that you will find so many rules and regulations, which might comprises of ensuring your production site has all the correct health & safety legislation, which will ensure that your drinks are safe human consumption.
Processes Involve in running a Beverage Manufacturing Company
There are so many processes involved in running a beverage manufacturing company. Starting from carrying out a market research to testing flavors that will best suit the needs of people in your demographic area. Flavors in the sense that; maybe you are producing for adults or children or both, there are always different flavors for different beverages.
Once the flavor you will be producing is ascertained, the next thing is to develop and execute a solid marketing plan to make you get your brand known to masses.
Beverage processes involves a different technique which determines the make or break of the success of a particular beverage. Therefore, you need to ensure the safety of the formula going into the manufacturing of your beverage products.
However, before developing solid market plan, you need to spend more time in perfecting your recipe for your product idea and other related products you want to do in relation to beverage manufacturing.
Furthermore, you can as well, host parties of beverage taster, which might be your friends and families for feedback. After they tasted it, you can also take the product to a public gathering for more feedback on the product. Public gathering in this sense means, going to Beverages stores and asking the owner to allow you to carry out taste testing on your beverage products making use of their customers and they beverages will be served for free.
Finally, the amount of information you will gather here, will help you in determining how quality your beverage products are; maybe you need improvement or its good enough to produce in large quantity and start the business with full force.
Some of the Basic equipments you will need to purchase in starting up a beverage manufacturing company are:-
- A Power plant
- A Mineral Water plant
- Bottle capping machine
- A standard filling machine
Develop your Production Plan
In developing your production, you need to first of all figure out whether you will be outsourcing your product to an existing bottling company or you will erect/lease space to set up your own operation. Both options has merit and demerit though.
Moreover, one benefit of dealing with a bottler is that, you will save funds and time by outsourcing the day-to-day beverage production and by doing this, you will give up some control over how your drink will be produced. However, if you are producing soft drinks, some components that will be in your production plan are:-
- Contracting staff to produce the beverage
- Obtaining your ingredients
- Generating a production budget
Needs Business Plan for Your Beverage Manufacturing Company
After making the decision to go into the business and once you’ve got your recipe, product line and demographic location, then you will need to start branding your business, and most importantly you will need a comprehensive and well-articulated business plan for your entity. Inside the business plan, there will a lot of content that will make your going into the business easier and let you have a great deal of idea of what you need to do, what you will be expecting and so on.
However, taking some time to create a thorough business plan which will details everything from your ambitions to your financials and marketing strategy, and it will put you in good stead to succeed.
Meanwhile, you will be advise to include products pipeline, sales and Marketing, operations and everything that happens in the cycle between a customer ordering and the business collecting cash, also where the cash goes to and all resources needed in the business, which could be in relation to accounting, legal professionals and so on into your business plan.
The details you will have in your business plan includes:-
- Your Goals and objectives
- Start-up cost and Operation Costs
- Market Analysis
- Unique selling point
- Marketing strategy
- Projected Earnings/ Financial Modelling
- Exit Strategy and lots more.
Meanwhile, you have to know that the power of a business plan can never be doubted. It will help you in following through your business in phases and also make you to make smart decisions from the beginning of your business and also make you prepare for your business expansion as the business grow.
Funding of the Business
Finance is a major part for any business startup. It is pertinent to know how much it will takes in developing your product, as well marketing it. Moreover, initial startup costs of any business are usually the bone of contention for so many entrepreneurs going into new business.
First thing, you have to look inward into your wallet and see how much you personally have to invest into the business. There is no new business you won’t have to spend some part of your money into it. After accounting for how far your own personal funds can carry you, you can now think about the need for an investors. So many business thrives well when professional investors invest their funds into their business and the investors will be given a certain agreed profit sharing ratio.
Lastly, another way of funding your business is through Bank Loan. To secure Bank loan as a startup business, then you need to make sure you have a well-articulated Business Plan. That’s why you need a service of a good consulting firm to help you prepare a well-prepared business plan that can make accessing bank load easier for you. Do you need the service of a consulting firm for your Company Business plan today, then you need to contact us @ Bulls Capital limited via www.bullscapitalltd.com .
Market Size and Marketing Strategy
Market size and market strategy is a very important aspect of a business. Basically, it’s advisable that, when planning to launch a beverage manufacturing business, you need to explore the beverage market. Because the market is so competitive. You need to know the size of your market, and how much of this market you products will be able to cover. Also, employing the right kind of marketing strategies play an important role in shaping the success of your beverage business. Right advertising medium and brand ambassadors has always been playing a vital role in making a business gain ground in its industry. The global average beverage market appears so enticing with opportunities for non-alcoholic and alcoholic beverages and this market is expected to reach an estimated $1.9trillion by 2021 and it is believed to develop at a CAGR of 3.0% from 2020 to 2023.
In marketing your products, you can make use of television media, bill boards and excess use of all your company social media platforms. And another way is carrying out free shows for people where, your drink will be sell to people at a promotional rate or free.
You also need to know that, if you want to build your customer base and develop your turnover, then you have to make use of any cost-effective marketing approach, forge brand partnerships and always make sure you are visible on social media.
Building your Brand and Online Presence
When running or starting up a business, you need to plan on building your brand. And building a brand, you will think of designing a Logo to serve as point of identification to your products. You will as well design bottles or plastics you want to use in packaging your products. The logo you will be designing must be well designed and be able to portrays what your business is all about.
Furthermore, so many beverages manufacturing company are identified based on their logo and bottles design. For example, if you see “33” logo, you will know that is 33 beer; also, if you see Pepsi brand Logo, you will know that’s Pepsi. They were all doing this a way of branding their business. A distinct bottle is needs to design, so as to make your brand different from other existence beverages.
Likewise, packaging is part of branding, the way you package your beverage products goes a long way in making your products known to different people. Packaging, for instance; the artwork on the body of bottle, the cartoons, bottles or cans type you use and finally, your trademarks (which is your intellectual property),
However, talking about Online Presence; all business needs to have a strong online presence, maybe they want to sell their product online or not. You need a website that will have all the information of your business, in which your potential customers will have access to. And from there, they will get attached to your products and definitely reach out to you. You have to make sure the website is professionally designed and routed. On this website, you will also need to direct visitors to your social media platforms too.
Lastly, you have to know that, without strong online presence, people may not be able to get immediate information about business.
Location of the Company
In starting up any business, location should be one of the thing you need to focus on. You need to be able to identify a suitable place for your business, which will make your business thrive very well.
Therefore, when choosing a good location for beverage manufacturing company, you need to consider both business and legal activities of the chosen location. For instance, can the location be able to accommodate your future expansion? Can your business be allowed in that location? Will there be enough space for storage and office space and so on.
Determining Your Primary Demographic
Primary demographic is known as the segment of the population which might have interest in your beverage product. Therefore, you need to narrow this down to a very specific consumer type, so as to cultivate the perfect formula and marketing campaign that will be used to reach those consumers.
Meanwhile, once you have identified your audience; you will need to research on them and know their buying habits. That is, where do they buy beverages? How and when do they consume those beverages? Which beverages are they consuming now (alcoholic or non-alcoholic) and what attract them to those beverages?
Sales and Distribution Strategy
An effective sales strategy is very significant in beverage manufacturing business. For instance, you can make a request for wholesales or distributors from major towns in your state or across the country. And, you can also be your own distributor; that is, you have to employ additional employee to serve as a personal marketer to your company alongside a Bus driver to work with him.
Distributors will come all the way from their offices and buy your products in bulk, while you give them discounts on the goods they purchased. Also, if you are sending out your own company’s personal marketers, you will order them to sell to people in discount too. Doing this, your brand will be gaining ground in the market and with time, your business will thrive and more sales will be made.
However, you have to know that, pricing is a key component that should be monitored very well, when it comes to sales strategy. Your price at the inception of your business, can actually draw customers to your brands. You can do this, by knowing the price of your competitors in the industry, and set your own price below theirs. This will be buttressed more in your business plan’s Competitor strategy.
Your company’s distribution must also think about the location where final consumer will buy the beverages, and this locations comprises of restaurants, bars, hotels and cafeterias, therefore with this, you can build a strong relationships with the distributors who supply these places.
Consult www.bullscapitalltd.com for your well-articulated BUSINESS PLAN
Finally, the success of your beverage business depends solely on planning. When you plan well, you will understand how to approach the business. And part of the planning is to allow a professional consulting firm prepare a well-articulated business plan, as well as production plan for you.
Most times, this business plan will make it possible for you to secure external funding for your business. Also, you need to know that, another way of protecting your patents and trademarks as a beverage manufacturing company is by ensuring that your key employees (Employees that know your beverage product formulas) sign employment agreements, so they may not be able to leak the secret of your brand to competitors.
However, as a way of summarizing how to start a beverage manufacturing company, there are the following steps to take:-
- Planning your Business
- Forming a legal entity
- Registering for taxes
- Opening a business bank account
- Setting up your business accounting
- Obtaining necessary permits and licenses
- Acquiring Business Insurance
- Defining your Brand and
- Establishing Web presence for your business.
About the Writer
Olusipe Abiodun Yinka is an Audit Associate in Bulls Capital Limited. He has a National Diploma in Accounting from Abraham Adesanya Polytechnic as well as a Degree in Accounting from Alex Ekwueme Federal University, Ebonyi State. He is a creative copywriter and a Trendsetter. Apart from writing, Olusipe is also an entertainer.
To know more about how we can help with this service, please call 08023200801, 08075765799, email: firstname.lastname@example.org. Alternatively, you may complete our request for proposal form hereunder.