Welsh Witterings: 5 GOLDEN RULES TO SETTING UP AN ARTISAN DRINKS COMPANY – TIPS AND ADVICE TO MAKE IT PAY
Thinking of Setting Up An Artisan Drinks Company? Here Are Some Tips And Advice
The artisan or craft drinks market today has grown. There was a time when the art of the still room was second nature. Family recipes were perfected, closely guarded and handed down for generations. Our forebears knew how to brew, ferment; create cordials, syrups and soft drinks. Today we are well versed in shopping, unscrewing caps and uncorking bottles.
Whilst I could ponder over when the artisan gin market bubble will burst, I think a more interesting and much easier start-up sector of the drinks market exists, that of artisan soft drinks. Whilst the term ‘craft’ continues to dominate many areas of the drinks industry, the soft drinks category appears to be immune to the concept and this is what makes me feel that it is an ideal market to get into.
Both the beer and spirits categories are experiencing what can only be described as the craft movement; a wave of producers rising up from nothing to compete with the corporate and well established brands that have been wetting the palettes of consumers for years. Every craft product has its own story, a product beginning life as a dream discussed around a kitchen table rather than a concept put forward on a boardroom table and pop along to any food festival and you will see the producers with their drinks range, boasting artisan production techniques and personalised stories giving consumers an experience as much as giving them a drink.
There is no reason why the soft drinks world can’t join in the craft boom, but this category does have a few obstacles to overcome and the main one of these is that it can be difficult to extract a premium price for a non-alcoholic drink. Though, this is not to say that there isn’t a call for craft soft drinks that appeal to adults, because there most definitely is. Indeed, even some big industry players have dabbled with craft positioned soft drinks. PepsiCo launched the Stubborn Soda range in 2015. The product was delivered in a stylish bottle and certainly looked the part, but of course coming from a major producer there was no real story behind the brand.
There are plenty of soft drink producer success stories, for example historically Innocent [the juice and smoothie producers, founded in1999] targeted the same age-profile of audience as craft beer has. The company was launched after success at selling smoothies at a music festival. Their marketing strategy of the company was authentic and unorthodox and though now part of The Coca-Cola Co the original start-up company conveyed and authenticity an ethic that made us all want it to succeed.
Fever-Tree’s story began with the Phileas Fogg-like search for the highest-quality quinine, the key ingredient of tonic water. The quest concluded in the war-torn Democratic Republic of Congo. Ingredient sourcing for its products is a major part of the brand’s positioning and, by highlighting the effort that goes into securing such provenance will always justify a premium price.
If you are still not sure if there is a market for craft soft drinks then you need to consider that despite the emergence of more and more artisan alcohol producers, more of us are shunning alcohol than ever before in the quest for better health, improved sleep, clearer skin or to raise much-needed funds for charity. So if you’re sitting on the fence, thinking about whether to jump on the artisan soft drinks wagon, I’d say now is the time.
If you are thinking that you’d like to produce something more sophisticated with a premium price tag, then you may want to consider Seedlip Spice 94 created by Ben Branson – the world’s first distilled non-alcoholic spirit. It combines six individually distilled barks, spices and citrus peels resulting in a complex drink that can be enjoyed with tonic water. Blended and bottled in England, the unique distilling process (similar to that of gin), boasts zero calories, is sugar, sweetener and artificial flavour-free and all of the credentials have earned the product a price tag of £27.95 for 70 cl [39.95 per litre]
The great thing about producing a non-alcoholic drink is that the demand for non-alcoholic cocktails is growing and you will not have the costs and regulation compliance involved in producing a craft alcohol. However, you will need a good dose on innovation. Banishing alcohol shouldn’t mean compromising on flavour, so if you want to produce and launch a successful alcohol free drink you will need to explore and experiment with cordials, botanicals and tonics.Don’t settle for flavours and ideas that are already there. Be daring and try different taste combinations, bearing in mind how your ‘posh pop’ could be used by a bartender. You will need to think about not only your flavour combinations, but your packaging and marketing strategy. In the drinks market it is essential that your marketing really conveys a story and you need to think about your unique selling point, for example most syrups are made heating fruit and sugar together, perhaps your unique selling point will be that you produce a non-heat treated syrup. Or perhaps you want to use ‘grannies’ old recipe for barley water, but make sure you can demonstrate the provenance of whatever you market.
When putting together a marketing plan and deciding on a recipe think to yourself, how can this make a big impression on mixologists, bartenders in restaurants, bars and hotels. In short how can my product make a big impact on the non-alcoholic drinks sector and also be used in cocktails. You need to be clear on this so you can get your marketing message across clearly.
Whether you have produced an artisan range of drinks, a jam, marmalade or a range of hand-crafted soap you will only be successful if you can find a route to market. You can produce the best product in the world but if you can’t sell it, it will never be a success so you really need to spend time considering your route to market. You may initially assume that retailers are waiting with open arms for small, good quality producers to approach them, however, the reality is that they are bombarded by small producers and have limited shelf space.
The route market is not necessarily easy, but then neither is running your own business. The odds for those starting up a small business are not favourable. The Federation of Small Businesses says more than half of new businesses will fail in their first two years. Don’t despair, because there are plenty of success stories:
Farmer William Chase was forced to diversify after failing to make enough money from potatoes. He launched Tyrrells Crisps in 2002 and sold the company eight years later for £30m
Sipsmith gin and vodka
Fairfax Hall and Sam Galsworthy worked for Diageo and Fullers, before opening the first recorded spirit micro-distillery in London in 200 years. They now make over 400 bottles of spirits per day
Father/son team Ian and Peter Craig first entered their ice cream for the Great Taste Awards in 2002. Their products have since won 40 awards, and are stocked by Selfridges and Wholefoods
Launched in the 1970s, William Tullberg’s condiment company is now world-renowned. All products are still made in small batches, and are stocked at food-counters from Hungary to Japan
In 1999, three friends bought £500-worth of fruit and created a smoothie empire. In 2011 they sold a majority share to Coca-Cola for £60-70m
In order to compete in an increasingly overloaded market, you need to get your product seen in the right places and this is key to success.
Get out and about – you need to get your products in front of the public
Build a brand story and make sure it has provenance and makes sense
Farmers markets are good way of building up brand awareness
Food Festival stands can be good – but watch your overheads
Sell online – there are plenty of online retailers that will allow you to sell your products on their sites
Set up a Facebook storefront and sell direct to the public through social media
Consider arming yourself with sample products and price list and calling into farm shops, butchers, bars, restaurants etc to pitch your products – this is no time to be shy
Avoid expensive advertising and unnecessary costs instead invest in good branding, stands and promotional material.
Practice your pitch
Have faith in your products and adopt a winning attitude, this makes such a difference when approaching people
The five golden rules to winning the artisan producer game
Do your research: is there a market for your product?
Put it in front of strangers: would they pay for it?
Find the right outlet: does it stand out on the shelf?
Secure your investment: it costs more than you think- you need to be able to fund failures
Be prepared to fail: half of new start-ups go broke within two years
Whatever you choose to produce, have fun and take your time – Rome really wasn’t built in a day and things rarely happen overnight. Hard work, persistence and a terrier-like attitude are most certainly required in the ever-increasing artisan product sector. On occasion a good sense of humour and mild insanity are also much needed traits.