Beverage Company Idea

[WheelsRCool]

So I was doing some brainstorming on business ideas and I got the idea for a beverage company of, instead of trying to create just the "next big thing" in beverages, like the next VitaminWater say, what about creating a company that consists of a bunch of niche beverage brands that are successful?

Upon doing some research, I have discovered that niche brands are becoming a big thing in the beverage world. They carry higher risk for retailers and distributors than the huge established brands like Coke and Pepsi, but they also offer higher margins and more customization. The big brands also seem to have trouble competing in terms of the creation of niche brands of their own (they love to buy ones entrepreneurs create from scratch though).

So what if say one designed a company that had, say, thirty beverage brands that were niche brands, with each brand pulling in at least $20 million in revenue each year. Well $20 million times 30 = $600 million in revenue per year, and that is assuming each brand gets at least $20 million in revenues. If a few of the brands could get up to $100 million in revenues, then that would be super.

$20 million or $100 million even are small potatoes in comparison to the big beverage companies, but for a privately-owned company, one could easily see at least a $500 million to possibly $1 billion company if this was executed properly, which would be really great.

Also as you gained in size, you could probably acquire other niche brands that have good potential along with creating your own.

Was wondering what people think (and yes I know I post all sorts of various business ideas, my last one was for a ecommerce toy company, this is just another random one possibly for the future!)

:smx6::smx6::smx6::smx6::smx6:

 

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[JayKim]

There's one that's anti energy drinks. It's called Slow Cow. I haven't tried it yet or heard of any others. Anyone had it? :cheers: :smx6:

Slow Cow—Drink that makes you relax | YASKY Information


http://www2.canada.com/life/canada+unofficial+cocktail+caesar+turns/1592386/story.html?id=1569531

 

[hatterasguy]

Their are so many different types of drinks that they just blend together when they are on the shelves. Seems to me like a very saturated market. Even the big guys are doing most of their growth outside the US.


IMHO I think you would do better trying to sell something like "Super American Cowboy" soda to China or something like that. A niche slice of Americana would probably do well.

Cokes growth plan over the next 20 years will mostly be in countries like China, India, etc.

 

[michael]

IMHO I think you would do better trying to sell something like "Super American Cowboy" soda to China or something like that. A niche slice of Americana would probably do well.

Cokes growth plan over the next 20 years will mostly be in countries like China, India, etc.

Great suggestion.

There is a limit to how many niches exist to be exploited in the American market especially considering how many competitors exist scrambling for their share.

I find it hard to see someone being able to even create 30 unique beverages to market, its even harder to picture each of those 30 drinks making $20m revenue each, that's nearly 20m cans sold for each product.

When I think about some of the drinks that have had some big success recently I think of Vitamin water which was able to build up a huge market share in under a decade, as was Monster and RockStar energy drinks by capitalising on the niche already carved by Red Bull but they all focused on their core products and variants of them, they didn't create 30 drinks in niche markets.

As Hatterasguy said exporting a product overseas could do well, Japan probably has less red tape to navigate than China and the people love American culture, look at how well received Baywatch was there.

Create a good product, burn holes in your shoes selling it to distributors and shopkeepers in your state and then use your earnings to export it to Japan using an advertising campaign involving busty women with your drink on Californian beaches

 

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[Sparlin]

This topic was on Shark Tank two weeks ago (episode 9). They thought the market was too competitive.

 

[GlobalWealth]

A good friend of mine has a beverage company that produced and energy drink. The product was by far the best tasting I have tried, but business fizzled (pun intended). the beverage market is just so saturated. Distributors are bombarded daily with the "next redbull" or the "next vitaminwater". It is expensive to get good shelf space in retailers and 70% of your revenue can get eaten up in marketing cost. From talking to my friend about his company, there are hundreds of beverage brands that start up each year, with less than 1% that last more than 1 year. the likelyhood of having even 1 of your brands do $20m in revenue is very remote, much less 20 of them. My friends company had a strong local presence and was starting to grow regionally and was doing less than $2m/year. His limiting factor was $. Drinks are about advertising, not product. Can you outspend Coke, Pepsi and Redbull in marketing dollars? I don't like to be a Debbie Downer (SNL), but this is shark infested waters and definitely not fastlane. At least not fastlane up...

 

[WheelsRCool]

Thankyou for the advice peoples; yes, I know creating a beverage brand is definitely not fastlane (most likely), this was more just an idea I was thinking of for perhaps in the future, after I have a lot of money from another fastlane business and wouldn't be a capital-strapped entrepreneur.

I see what you mean about market saturation though, that means just focus on one brand.

One thing about VitaminWater though, the founder of VitaminWater was told consistently that his dreams of growing VitaminWater into a huge brand was just unrealistic, and would not work; he proved them wrong. Yes, I know there are probably tons who get told this and the critics are correct too, but I mean one can occassionally succeed.

I would view this more as a "fun" business I guess, where if you are passionate about the beverage industry and really want to try and already have a lot of capital, you could attempt it.

Again, thanks for the advice.

 

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[hatterasguy]

This topic was on Shark Tank 9 two weeks ago (episode 9). They thought the market was too competitive.

I agree with them. Their are so many different brands out their that I think every niche has been over filled.

If I had a lot of money and I wanted to get into the beverage business I'd buy Coke stock. Warren Buffett in a talk recently made some great points about why he likes coke. One of them was a lot of growth outside the US over the next 20 years. But his main point is that you cannot compete with them. They have their unique business and have built a shark infested moat around it.

Even the beer market is saturated.

 

[michael]

I agree with them. Their are so many different brands out their that I think every niche has been over filled.

If I had a lot of money and I wanted to get into the beverage business I'd buy Coke stock. Warren Buffett in a talk recently made some great points about why he likes coke. One of them was a lot of growth outside the US over the next 20 years. But his main point is that you cannot compete with them. They have their unique business and have built a shark infested moat around it.

Even the beer market is saturated.

Yea unless you were able to come up with a unique product that would be good enough sell itself on word of mouth I would agree with you in saying that only overseas markets have any room for new products really.

 

[PaulRobert]

Yea unless you were able to come up with a unique product that would be good enough sell itself on word of mouth I would agree with you in saying that only overseas markets have any room for new products really.

+1- Overseas markets are still young when it comes to energy drinks. When I was in Europe and Africa over the summer, they only had 2-3 brands of energy drinks on the shelves. Now if you could create an energizing organic fruit juice in a can...... :smx19:

 

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[BurnBright]

Beverages are a saturated market but to say it can not be fastlane is wrong IMO. I do think that taking a multi-product approach and seeing what sticks may not be the best approach just because of the launch costs of each brand. But you could focus on a part of the market that the majors are not involved in which is what happened in the energy drink, vitamin drink, markets and before that in the fruit blend markets(remember Snapple?). As someone mentioned before one new market is the anti-energy drinks which are just packed with melatonin and other "natural" stuff to make you sleepy. (As an aside just read about a club party in the UK where they mixed this stuff with gin and had a meditative rave party). The other ones I have seen are those 5 hour energy shots. Oh and how about Mona-Vie that’s just a vitamin drink repackaged and put in a MLM model.

So for an idea, how about go into the anti-energy drink market. Make a flavor that mixes well with gin/vodka and market it though the clubs. If the meditative raves take off you could be one of the first adopters and its popularity could go viral. Another idea would be to knock off Mona-Vie and sell it thought the Whole-foods type grocery stores or online using an auto-ship model.

So even if it is a very competitive slow growth total market try to find a fast growing micro-niche within it and be the best within it.

 

[djs13]

Although I agree the soft drink/energy drink market is saturated, I wouldn't let it stop you from trying if you think you can make it.

Five Guys Burgers is a great example that just because someone is doing it doesn't mean you can't succeed. The company started in '86 and has become a huge success in an industry taken over by corporate giants. In the area of New York I live in, Five Guys has virtually brought McDonalds, Burger King, Wendys and Red Robin to their knees. These other fast food places which used to have long lines or waits, have become empty since Five Guys moved in.

And just a word of advice, Guy Kawasaki's method in predicting how profitable a business will be is based off of how many customers the business will come in contact with and then determining the success rate of each custmer. This seems to be more reliable then guessing how much sales would be.

 

[WheelsRCool]

Good advice peoples, thanks

 

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[michael]

*deleted*


I wrote a big response but even though I submitted it all only half the post will show up

Edit: finally worked...



All your said your posts make you seem fixated on billionaires, billion dollar ideas and even last year you were dreaming about $500m ideas, you seem to have lifted the boundaries.

Why is it that you seem set on finding the perfect idea that has billion dollar potential?

Unless you are set on buying one of the nicest homes in Manhattan, Beverly Hills or any large city there is no home you can buy with $1bn worth that you can't buy being worth 'only' $100m or $400m, there is no car you can't buy being worth 'only' $100m so unless you are set on grand homes in all the major cities, superyachts and airliners as your private jet I don't see why $1bn is your definition of success.

I read your old post where you said you wanted $500m to do ocean research, I am sure with even a 'mere' $50m you could afford a good size expedition vessel and crew of scientists.

If you're set on that $1bn idea you are going to miss the hundreds of $10m, $50m, $100m and $250m ideas that are all around, except for solar startups and other green energy project there will not be too many more ideas that have potential to be billion dollar businesses whilst you're still young.

Also don't forget that most of the self made billionaires are older and have either:
1. had decades to build a billion dollar business from their idea (most of them)
2. sheer luck of being involved in a billion dollar project from the start (google guys, Microsoft guys etc..)
3. had one successful business with revenue in the million dollar range and somewhere along the line branched out into a venture that made them their billions (Dennis Washington of Washington Group is an example, Richard Branson is another his empire stated with a magazine which he built to a smallish readership and leveraged its reach to launch his big money earning record label)
4. had a failed idea which they adapted and made lots of money (look up the History of Paypal, it was originally a useless application for sending money between PDAs but the founders met up with another startup guy and created what we use today)

Now I'm sure you don't want to take decades building your $1bn networth and you don't want to sit and wait for luck to bless you.

Why not pick one of your ideas that can be brought to the market within a few months, using your spare time get out there and sell it to customers/wholesalers, if the product and marketing quickly produces great results that tell you if it is worthwile to keep following your dream.

 

[WheelsRCool]

*deleted*


I wrote a big response but even though I submitted it all only half the post will show up

Edit: finally worked...



All your said your posts make you seem fixated on billionaires, billion dollar ideas and even last year you were dreaming about $500m ideas, you seem to have lifted the boundaries.

Nope, I was dreaming about $1 billion then too however, that idea you are talking about, I am still fixated on that idea, it is to be my first business.

Why is it that you seem set on finding the perfect idea that has billion dollar potential?

I wouldn't say it's about finding any "perfect" idea, I just like to throw various ideas out there to get people's opinions as well because I am curious. I actually have a a huge variety of billion-dollar business ideas now, nothing ultra-special about any of them, just industries I have researched that have billion-dollar companies but the industries are not concentrated (meaning there is room for another billion-dollar business).

For example, trucking. Trucking is a fragmented industry. There are billion-dollar trucking companies, but it's not like the industry is dominated by any few companies. So one could make it a goal, long-term, to build up a huge trucking company (the tough part is to get the money initially to start it, which would require a smaller business built from scratch and made successful I suppose).

Unless you are set on buying one of the nicest homes in Manhattan, Beverly Hills or any large city there is no home you can buy with $1bn worth that you can't buy being worth 'only' $100m or $400m, there is no car you can't buy being worth 'only' $100m so unless you are set on grand homes in all the major cities, superyachts and airliners as your private jet I don't see why $1bn is your definition of success.

Well you can't afford something like a Boeing Business Jet (they cost about $100 million) with that amount (although you can charter them)

And hey if I hit $100 million or $400 million and then say, "Hmm...no need to keep making more, I have all I want," well then I will stop. If I enjoy the process, I will keep going (I doubt Warren Buffett keeps going because he needs any more money or Wayne Huizenga kept going for more money, etc...).

I read your old post where you said you wanted $500m to do ocean research, I am sure with even a 'mere' $50m you could afford a good size expedition vessel and crew of scientists.

I think I meant I wanted to own the expedition vessel; however, for charter purposes, you are probably correct.

If you're set on that $1bn idea you are going to miss the hundreds of $10m, $50m, $100m and $250m ideas that are all around, except for solar startups and other green energy project there will not be too many more ideas that have potential to be billion dollar businesses whilst you're still young.

Yes; there are many opportunities for billion-dollar businesses, but many of them are longer-term projects that require one to have some decent $$$ from the get-go. I do pay attention to the smaller business ventures to start so that I can then acquire said $$$.

Also don't forget that most of the self made billionaires are older and have either:
1. had decades to build a billion dollar business from their idea (most of them)

Yup. I view billionaire status as a long-term goal. Multimillionaire status is the shorter term goal.

2. sheer luck of being involved in a billion dollar project from the start (google guys, Microsoft guys etc..)

Yup...

3. had one successful business with revenue in the million dollar range and somewhere along the line branched out into a venture that made them their billions (Dennis Washington of Washington Group is an example, Richard Branson is another his empire stated with a magazine which he built to a smallish readership and leveraged its reach to launch his big money earning record label)

This is essentially my strategy, start with a smaller venture, then use the money I make from it to launch into a venture with really big potential.

4. had a failed idea which they adapted and made lots of money (look up the History of Paypal, it was originally a useless application for sending money between PDAs but the founders met up with another startup guy and created what we use today)

Now I'm sure you don't want to take decades building your $1bn networth and you don't want to sit and wait for luck to bless you.

I do not mind spending a couple decades doing it as long as I am living life at the same time. I mean if you must sacrifice everything else, probably not, but that may only be necessary at the very beginning of the business.

Look at Vizio, for example, William Wang started that and built it into a multibillion-dollar electronics company with the largest share of the market for flatscreen TVs within about five years, Newegg.com was started with $100,000 and grew to $1 billion in revenues in four years, and $4 billion within seven years overall. Zappos hit the $1 billion mark within seven years.

Wang said that he no longer works the loooong hours he used to, that he now has gone to a normal workday.

So I mean it would all depend.

Why not pick one of your ideas that can be brought to the market within a few months, using your spare time get out there and sell it to customers/wholesalers, if the product and marketing quickly produces great results that tell you if it is worthwile to keep following your dream.

That's what I am working on right now.

Thank you for the advice though, I appreciate it. But do not be surprised if/when I put forth other business ideas as well for critiquing, I just like to get opinions :cheers:

 

[michael]

Look at Vizio, for example, William Wang started that and built it into a multibillion-dollar electronics company with the largest share of the market for flatscreen TVs within about five years, Newegg.com was started with $100,000 and grew to $1 billion in revenues in four years, and $4 billion within seven years overall. Zappos hit the $1 billion mark within seven years.

Wang said that he no longer works the loooong hours he used to, that he now has gone to a normal workday.

So I mean it would all depend.

Indeed, although I remember reading in INC Wang had built a $600m revenue company during the dotcom boom so he had quite a lot of money to invest in Vizio so its growth might not be representative of a bootstrapped startup; a store like Zappos or Newegg would possibly reach the billion dollar mark with the right team and outside funding from an early stage too if you found the perfect niche.

And keep in mind MJ's graph of an entrepreneurs earnings over time where earnings are a exponential function, even if you manage to build a much smaller company once you manage this you'll have the money, knowledge and most importantly connections to build something much bigger.

That's what I am working on right now.

Thank you for the advice though, I appreciate it. But do not be surprised if/when I put forth other business ideas as well for critiquing, I just like to get opinions :cheers:

No problem, it pays to think creatively and it's fun to take an idea and fiddle with some hypothetical numbers on a quickly scribbled balance sheet, nothing wrong with that so keep sharing your ideas.

I thought you posting all these ideas was a sign that you were unsure of where you wanted to start, I didn't know you were working on something so my post was in the hope I'd post to encourage you to try your hand at a smaller venture.

Good luck with your venture I'm working on a beverage product at the moment, still at the stage where I am trying to include the right stimulants and other ingredients to differentiate it and if I can do this I'll start marketing it to the university campuses, cafes and schools nearby.

If I can get it right and people like it (and buy lots of it) I'd do like what hatterasguy said and make an incursion into foreign markets, any drink which helps keep people alert and upbeat will be a hit in the workaholic cultures of many Asian nations.

 

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[WheelsRCool]

That's great, good like with your beverage. On stimulants, I'd suggest make sure it just keeps you "alert and upbeat" but not having the effects like speed! I tried one of those Monster brand "energy drinks," HOLY HIGH HEAVENS I was like a race horse for hours on end, I had so much energy, then when it all ran out, I crashed completely.

Yes, Wang did start after having built another company, Zappos started with a few million I think and Newegg started with $100K, it's founder having started a custom computer-building business before. Newegg did take a small bit of venture capital later on though I believe.

 

[JayKim]

That's great, good like with your beverage. On stimulants, I'd suggest make sure it just keeps you "alert and upbeat" but not having the effects like speed! I tried one of those Monster brand "energy drinks," HOLY HIGH HEAVENS I was like a race horse for hours on end, I had so much energy, then when it all ran out, I crashed completely.

Yes, Wang did start after having built another company, Zappos started with a few million I think and Newegg started with $100K, it's founder having started a custom computer-building business before. Newegg did take a small bit of venture capital later on though I believe.

Have you had spike energy drink? That company is kind of new but they seem to be doing well. Ive had one before and I'll never drink it again, I dont know what speed is like but this one is the strongest imo. It cant even be sold to people under 18. Some people had to be hospitalized for caffeine overdose. Spike Shooter Pulled From 7-Eleven Stores

Check out this chart, they compared it to other energy drinks. Its almost at 320, a maximum strength no doz is only at 200 wtf.
http://www.energyfiend.com/caffeine-content/spike-shooter

 

[WheelsRCool]

I just realized, the way I worded my post ("....it's like speed!") probably makes it sound like I once tried speed, in truth I have no idea what speed is really like (or any drug), but from my understanding it keeps you awake and very energized and hyper for hours, or even days, on end. Well the Monster drink did that for me for quite a few hours, so I imagine it was a very similar effect, but probably not for as long as a drug like speed.

 

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[CommonCents]

I looked at beverages recently and quickly found the energy thing has many fast follower copycats that already own the distribution channels(that is key and takes time/money). The only way you can get shelf space would be something completely different/new, not just a better tasting energy drink. I was pretty well entrenched in the food biz and when my distributors/customers got introduced to a new product, they showed it to me to see if I could do it for them. It was easier for them to buy from me. So that's the kind of headwinds you face even when coming up with a "unique" product.

There are a couple anti energy drinks that are doing ok. Think of these hard times for folks that need something for their sleepless nights and anxiety rather than something to rev them up.

Another good category is a hangover/prevention drink, one company launched at spring break selling them in test tube shooters by hot women. Sheesh, anecdotal evidence had kids drinkin a handful of these w/ their alcohol. LOL. Brilliant. They'll go places.

 

[JayKim]

Anyone had one of these yet? I only drank the neuro sleep, didn't think it would do anything since my insomnia but I was passed out in 5 minutes.

http://www.drinkneuro.com/?gclid=CP6W4s_mg6QCFZJl7AodMF9wHA

http://www.bevnet.com/news/2010/5-17-2010-Neuro_launches_in_NY_through_Pepsi_Cola_Bottling

"Neuro Drinks, the Southern California brand of healthy functional drinks that enhance active lifestyles, is hitting the East Coast.

Beginning this month, Neuro Drinks will be distributed by Pepsi Cola Bottling Company and will be sold in neighborhood grocery stores, delis, gas stations and high-end markets. Pepsi Cola bottles and supplies Pepsi-branded soft drinks, Gatorade, Tropicana juices and Aquafina water for New York City and beyond."

 

[Darkside]

They look like shampoo bottles. Weird shape for a beverage.

 

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[JayKim]

They look like shampoo bottles. Weird shape for a beverage.

They kind of remind me of a lava lamp.

 

[deepman]

I've tried couple Neuro drinks before and i wrote reviews about it on my blog. Anyway, for the OP, I think you should start with one niche in the beverage industry first because running a business and keep it a live is a lot more harder than starting a business. These days people wants to be healthy and especially the sweetener of the drink has to be natural, not HFCS. Right now, everyone is hyped about coconut water.

 

[MJ DeMarco]

Speed+

I love the beverage industry as an entrepreneurial market because many folks are looking for alternatives to traditional beverages. High Fructose Corn Syrup (HFCS) is being exposed as a nasty sugar and Coke/Pepsi are filled with it, as are a lot of beverages. There is a growing need for healthy "snack sodas" -- I replaced my soda with Honest Tea (a new beverage company upstart) and haven't looked back. I also drink "Switch" which is a 100% fruit juice carbonated product ... another alternative to snack sodas and yes, another relatively new company.

I think like our finances, the recession has made more people health conscious.

 

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[lacarrye]

Talk to REMOVED guys in Miami. They are a reputable Beverage formulations company and have a technical services team, they can answer many questions including market as well.

 

[MJ DeMarco]

Talk to Terra Labs, LLC guys in Miami. They are a reputable Beverage formulations company and have a technical services team, they can answer many questions including market as well.

Do you work for this company? Your Miami IP address and your 5 posts tell me you do. That would be something to disclose.

 

[Eskil]

Do you work for this company? Your Miami IP address and your 5 posts tell me you do. That would be something to disclose.

Lol.... no shit.

Way to bump a 2 1/2 year old thread, and spam the forum with new beverage threads out of the blue.

 

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[lacarrye]

Yes, I do. I'm trying to get my posts back to remove the links as should. I'm sorry for that.

 

[MJ DeMarco]

Yes, I do. I'm trying to get my posts back to remove the links as should. I'm sorry for that.

Please try a formal introduction in the intro forum ... I'll let the mods decide if they want to remove the links as around here it is considered self promotional, and a violation of the rules. Welcome to the forum.