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There is absolutely no need to make any kind of preamble to this statement: the retail industry is undergoing a massive shift, as consumers are modifying their shopping patterns and behaviors.

Companies are still reeling from the initial shock of the pandemic and diligently working to rearrange their supply chains and alter the way they distribute their products. As a result, we’re still not at a stage where we can predict which trends are here to stay and which will die down once the pandemic is over.

Let’s look at the four most prevalent ones you need to be mindful of in the beverage industry.

Stocking up as the new way to shop

We’ve all seen images of empty isles in what were once well-stocked supermarkets. We’ve all been privy to news coverage of supply chain disruptions and impaired production. And most importantly, we all feel the same anxiety over an uncertain future, and want to ensure we have what we need should the pandemic take a turn for the worse.

Products that are in the highest demand include toilet paper, disinfectants, and non-perishables. However, bottled water and other beverages also find themselves on most household’s shopping lists, as 47% of consumers claim they have been stocking up on essentials.

This heightened demand naturally translates into a higher need to increase production and streamline supply as much as is possible in the current climate. Beverage brands are advised to allocate most of their production to their most popular products – and to avoid launching new products for the time being.

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Whenever possible, it’s also essential to leverage home delivery options. Consumers would prefer to take delivery of a carton or packet of their favorite beverage, as opposed to going out to the shops and lugging it back home.

Shopping online

While we are on the subject of delivery, let’s touch upon that most obvious of shifts – online shopping.

The growing health and safety concerns of shoppers all across the world have resulted in an increase in e-commerce spending, with consumers ordering anything from groceries to toiletries and gym equipment to their homes.

A survey by Gordon Haskett has revealed that a third of shoppers have made an online food shop in the week prior to the survey, and 41% of them had done so for the first time. This is a clear sign that even customers who prefer to shop in person are now turning to e-commerce as a way to stay safe and source everything they need.

Despite issues such as delivery delays and limited availability, 97% of shoppers will continue to do food shops online even after the pandemic is over. That’s why beverage businesses need to step up and offer the option as soon as possible.

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This is also a chance for smaller companies to get noticed by customers when their usual beverage of choice is out of stock, as most consumers claim they will make a purchase from a brand previously unknown to them rather than forgo the order altogether.

Establishing an online presence – either on your own website, via social media, or by becoming a part of a larger shopping network’s offer – is currently a must. Even if e-commerce was not previously on your radar, now is the time to add it, and high time at that.

Focus on health and immunity

As there is still no medication that can effectively and widely combat a Covid-19 infection, and as the body’s own immune system remains the most important defensive mechanism, people have started focusing on nutrition and immune-boosting like never before.

We are expecting to see a 25% increase in the sale of immunity supplements during the course of the year, as shoppers continue to reach for products that might help them battle the disease.

This will also elicit a rise in those who are choosing to make their own capsules from specifically tailored, quality ingredients.

As a beverage brand, you can focus on marketing products that can benefit the immune system. These might be products high in Vitamin C, electrolytes, minerals, and other ingredients that are considered beneficial to combating diseases.

How much you care will come under scrutiny

Never have consumers been as interested and as influenced by a brand’s values and behaviors as they are today when social media lets us scrutinize just about anyone and anything.

They expect the brands they love and who have previously shown their engagement with social issues to step up and raise awareness, help where they can, and treat their employees well, keeping their safety a priority in these dangerous times.

Brands that claim to focus on their customers and staff but are not enabling employees to work in the safest possible conditions are losing trust and customers quickly.

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As a business in this climate, you need to choose the way you want to react to the pandemic – one that is in line with what your brand already stands for – and act accordingly. If you have been vocal about community service and engagement, you need to act on those values now, or risk being dumped by a lot of your customer base.

This can also be your time to shine – not merely as a marketing tactic, but as a way to genuinely establish some sort of relief and help those who could benefit from your actions. Don’t think of it as a way to attract a new market base, but rather as a “what goes around comes around” kind of strategy.

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Final thoughts

As we try to navigate the shifting currents of the modern market, let’s try to keep one eye on the waves we are being tossed by, and another on the horizon. That’s where some of these trends may crash and sink, while others may swim ashore and remain embedded in customer behaviors for decades to come.

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Just five or so years ago, beverage startup failure rates were dismal, with as much as 90% of them going belly-up.

Skip forward to 2019: it’s still tough, but a lot better than just half a decade ago. According to research, 56% of small businesses started in 2014 made it past the first five years of operation, after which the failure rate drops significantly.

Small businesses and startups are being founded left and right, but not all of them are created equal. While it’s pretty normal for tech companies to experience a meteoric rise, since things move a lot faster in tech than anywhere else, beverage startups aren’t as lucky.

And it’s more of the same in other industries. We’ve all read about the Theranos scandal, which goes to show that you can’t treat a medical research company like an IT startup. Also, even though Tesla makes some pretty cool cars, the company still needed help from the US government because they couldn’t develop and/or make them fast enough. Does that mean you should give up on your dream of starting your own beverage company?

Not necessarily, but you do need to be more business-savvy than those that came before you. That’s why we’re going to look into why most beverage startups fail, and what you can do to avoid the same fate.

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1. Failing to Do Market Research

Regardless of how passionate you are about your beverage startup and how great of a product you really have, it’s not going to amount to much if you’re adhering to the old “if you build it, they will come” approach.

In order for your business, brand, or product to succeed, you need to know the answers to a number of crucial questions, including:

• Who are my customers?
• Who are my competitors?
• How much can I charge for my beverages?
• What’s my marketing budget?

For example, GT’s Kombucha is probably the biggest success story when it comes to beverage startups, especially in a world dominated by Coca-Cola and Starbucks. How did GT Dave turn kombucha into a business worth over $600 million? Well, for starters, he did his research and realized that more and more people were opting into a healthy lifestyle. What better to offer them than the naturally fermented probiotic drink with zero artificial ingredients? Easy – offer it in a variety of exciting flavors, put it in attractive packaging, and the rest is history.

2. Not Having Enough Cash

This is something that all startups have in common.

A small percentage of them, such as Liquid Death, a brand of canned water aimed at punk rock-oriented consumers (as contradictory as that sounds), are lucky enough to receive almost $2 million in funding from high-profile angel investors. Others have to make do with bootstrapping or borrowing money from friends and acquaintances, which is something that GT Dave also did by borrowing $10,000 from his mother.

But, whereas IT startups have a product that can be distributed through digital means and easily scaled, beverages are actual physical products that you need to produce, package, and distribute to your customers, which requires a lot more funds. Even if you do have enough cash to start with, you’re going to need more of it if you decide to expand.

Getting a loan from the bank can be a lengthy process with slim chances of your startup getting approved, which is why you may want to look into financing from non-traditional lenders . Maintaining stable cash flow is essential in order to stay afloat.

3. Not Exploring Alternative Routes to the Market

Best case scenario: your drinks end up on the shelves of some of the biggest retailers. However, because the competition is so stiff, and because consumers tend to stick with already established brands, even if you manage to get your beverages there, they will pull it from the shelves if it doesn’t meet expectations. What many beverage startups fail to realize is that stores and supermarkets are not the only way to their target consumers.

For instance, 67% of millennials and 56% of Gen Xers prefer online shopping over traditional brick-and-mortar stores. You may also want to look into your local scene and partner up with bars, clubs, and restaurants, gyms, or even music and sports events, depending on what kind of beverage you’re making.

Even though it’s not a beverage, Gringo Bandito hot sauce is still an excellent example. Created by Dexter Holland, who is best known for being the lead singer and rhythm guitarist for the legendary punk rock band The Offspring, Gringo Bandito served as the official hot sauce for annual Sabroso Craft Beer & Taco Festival – even though it was being sold at over 5,000 stores nationwide.

4. Not Investing Enough into Branding and Design

Although many beverage startups fail because of poorly thought-out marketing, all of them still realize the importance of marketing in the first place. But an even bigger problem than bad marketing is bad branding and design. You’ll come across numerous beverage startups lumping all of their funds into perfecting their product and promoting it to the masses but spending only a fraction of that cash to come up with a strong visual identity for their beverage brand.

If potential customers happen to come across your drink on the shelf, they’ll quickly form their initial impression of it by looking at the visuals and the packaging. They don’t see how much effort you’ve put in creating it, but they will be able to see if you’ve treated the design of your product as an afterthought.

Spending more on design is never a bad idea, and not just when it comes to product packaging, but also your website and social media accounts. All of them should feature the same visual identity.

5. Poor Management

All startup owners are required to wear multiple hats, which means they need to be equally adept at managing finances, marketing, production, distribution, and hiring. Unfortunately, this is not always the case, even if they have a capable team to help them shoulder some of the burden. If you fail to expand your skill set and learn new things or at least accept help and constructive criticism from team members who are more qualified, your startup may end stagnating or going out of business.

Being able to delegate responsibilities to other members of your team, to plan and organize things, constantly research the market, and save yourself from burnout is just as vital as knowing your product inside and out.

Final Word

Even though the business climate is more favorable for beverage startups than it was just five years ago, getting one off the ground and making it past the first five years is still very difficult. So, in addition to avoiding all of the don’ts above, you will also need to work hard and toughen up. There will be plenty of challenges waiting for you on your road toward success, but with determination and strategy, you’ll be able to overcome them all. Good luck!

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The food and beverage industry is very much different than any other industry there is. For example, here, loyalty starts with the very product, but that doesn’t mean your work is done if you manage to make a quality and delicious one. Your success depends on what are you going to do next. Making yourself known is the first step, but you have to move on to fostering brand loyalty to survive in this hyper-competitive area. Here are some simple tips that will help you position your brand and make it a must-have for loyal customers.

Be a part of your local community

Unless you are Coca-Cola, your aim (for now) is not to conquer the world. As a small manufacturer, you should address the needs of your local community and appeal to their taste. Locals love to know that some product is made out of locally-sourced fruits and vegetables.

This will not only result in mutual friendship with other entrepreneurs from your community, but it will also cause higher appreciation for your work among locals because you are boosting the local economy.

Don’t ignore the tourists

If your store is located in a popular tourist destination, you should not ignore tourists who could easily bring a huge chunk of your company’s profit. The good thing is that if you have won the hearts of the locals and got good recommendations from them on Trip Advisor and other apps, tourists are more likely to come by to your store.

Cater to different clients

When you first started your business, your idea might have been to cater to the urban young population. However, recent studies have pointed out that diversification is paramount to keep customers in the food and beverage industry.

This requires offering different aspects of your brand to a diversified clientele. For example, a quiet family dining or juice place downstairs and an urban place for younger guests upstairs.

Set a reasonable price

Going with the highest price will chase away your customers while going with the lowest will cause your business to lose profit. So, how to find the balance that works for both you and your customers? The pricing strategy for your products needs to include considerations about your costs, your competition, your target audience, to name a few.

By combining all of these factors, you will let your customers know you understand their needs, but you are also providing them with a quality product that is worth the money they pay.

Use the power of social media

If you are into food and Facebook, you have probably come across Buzzfeed’s food channel – Tasty. These short videos portray mouth-watering dishes being made (and eaten), and their top post has about 200 million views and 5.5 million shares. This says a lot about how social media makes you visible, but how it creates loyal customers?

Easy: it enables you to conduct surveys, communicate directly with your audience, and keep them informed about what’s new about your brand.

Provide with quality content

Customers can smell a sales pitch a miles away, and here’s some news for you: they don’t love it. Internet users, particularly, prefer quality content, served truthfully with a side dish of shareable information. Writing a blog can not only help you position yourself as a credible source in your industry, it can also lead to people coming back to your website or social media pages, just as they’ll come back to your store.

It’s not a brand, it’s a lifestyle

Social media and your content can help you promote your brand as a lifestyle and not a line of products. This way, users will want to promote for free because they are promoting something they can agree with. This can include offering behind the scenes look into your kitchen (e.g. Chobani) or supporting a cause such as Naked Juice’s Drink Good Do Good campaign.

Put your product “out there”

Selling in your store and online isn’t enough to make it in the food and beverage industry. You have to take your product out of its comfort zone and showcase it on street food markets, integrate it with venues, and ask famous chefs or other celebs to try, review, and if they’re satisfied, promote your beverage or food product.

Have a loyalty program

The simplest way to implement a customer’s loyalty program is to give free food or beverage for using your service or providing referrals. Such strategy encourages more spending, so it is, naturally, good for you. You can be more creative, though, but don’t complicate it too much. The type of reward should be something you can actually provide (without you having to withdraw the loyalty program when you realize you can no longer fund it).

Measure the loyalty of your customers

You must always be up to date with how loyal your customers are so that you could know how to improve this relationship. There are severally ways to effectively measure customer loyalty in this branch:

1. Surveys: because of the anonymity, they can provide you with honest critics which can help you grow and improve.
2. Referral programs: providing rewards for sharing and promoting your product provides you with more customers, but also with a healthy feedback loop.
3. Social media: the activity on your social media pages (likes, shares, and comments) can tell you which posts should you be boosting and the kind of people you are engaging with certain content.
4. Data analysis: a loyalty program which allows you to keep track of the data will help you go in the right direction. However, raw data means nothing if you don’t know how to analyze it, so make sure you have the experts who know how to read between the lines.

Building customer loyalty is an uncertain terrain in any industry, but it is even trickier for the food and beverage niche. The most important thing is to start with a good product, and follow the instructions that will help your business grow.