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How to Start a Soft-Drink Business

  Reviewed by: Michelle Seidel, B.Sc., LL.B., MBA
  Written by: Lindsay Kramer      Updated November 21, 2018
Pink colored beverage can top

Launching a successful soft drink business takes time and money. Although there are similarities between successfully creating and selling soft drinks and other consumer products, the soft drink industry requires entrepreneurs to develop a keen understanding of consumers' relationship with soft drinks and how factors like flavor, health consciousness and brand recognition fit into this relationship.

Tips

  • Take cues from successful soft drink companies to understand why they connect with consumers. Look at general trends as well as examples within your niche.

Determine Your Primary Demographic

Your primary demographic is the segment of the population that may be interested your beverage. Narrow it down to a very specific consumer type so you can develop the ideal formula and marketing campaign to reach those consumers.

Once you’ve defined your audience, research them and their buying habits. Where do they buy soft drinks? How and when do they consume soft drinks? Which soft drinks are they consuming now, and what draws them to those beverages?

Learn about your target demographic through market research. Use a variety of market research methods, such as focus groups, surveys and field trials.

Patent Your Product

You may want to patent your product so other companies cannot make an identical beverage and sell it as their own. A patent is not the same as a trademark or a copyright. Because your soft drink is a unique formula, you can protect it from imitators by patenting the formula with the United States Patent and Trademark Office.

Make sure you have a good understanding of patenting and what it involves. A patent doesn't last forever. Once it expires, anyone can copy your product. Additionally, you must disclose your recipe and other background information. That's why many companies, such as Coca Cola, KFC and Twinkies, prefer to keep their invention a trade secret instead of patenting it.

In fact, it's easier to obtain trade secret protection than apply for a patent. There’s no need to fill any forms or reveal your recipe. However, it's recommended to have non-disclosure agreements with your suppliers, employees and business partners.

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You will also develop additional pieces of intellectual property for your soft drink, such a mascot or a symbol. Protect these with trademarks from the same federal agency.

Develop a Production Plan

Somebody has to make the soft drink. The first thing to figure out is whether you’ll outsource it to an existing bottling company or build/lease space to set up your own operation. There are pros and cons to both options.

One benefit of working with a bottler is that you’ll save money and time by outsourcing the day-to-day beverage production, but by doing that, you give up some control over how your drink is produced.

Other components of a soft drink production plan are:

  • Sourcing your ingredients
  • Hiring staff to produce the beverage
  • Creating a production budget:

Create Relationships With Distributors

The last step in launching a successful soft drink business is getting your drink into consumers’ hands. You’ll have to get your drink on store shelves first and to do that, you’ll need to pitch it to beverage distributors and wholesalers.

Don’t just think about where the end consumer is buying the drink in bottles — think about the bars, restaurants, hotels and cafeterias where your consumer is likely to select it from a beverage fountain or order it from a server. Build relationships with the distributors who supply these outlets.

Once your beverage is on store shelves, your job isn’t done just yet. You still need to promote it and to do that effectively, you’ll need to determine the marketing strategy that best fits your target audience. That could mean launching a coupon campaign, leveraging social media, or partnering up with a snack food or alcoholic beverage manufacturer.

About the Author

Lindsay Kramer has been a full-time writer since 2014. In that time, she's experienced the ups, downs and crazy twists life tends to take when you're launching, building and leading a small business. As a small business owner, her favorite aspect about writing in this field is helping other small business owners and aspiring entrepreneurs become more fluent in the terminology and concepts they face in this role. Previously, she's written on entrepreneurship for 99designs and covered business law topics for law firms.

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