BevSource offers financial modeling for beverage formulation, providing financial clarity for cash flow management and profitability. An experienced partner on your side helps you understand your current and future business and take greater control of the financial side of your business plan.
Start Your Beverage With a Strong Financial Foundation
The number one question we get asked is “How much will my beverage cost?” You know it will take money to make your beverage, but the specific costs are unclear:
- How much do you need at each stage?
- How much will your final product cost?
- Will your price be competitive while still making you a profit?
- What can you do to reduce costs?
Understanding your beverage plan's financial details helps you find, allocate and align your resources for success. You will be able to make informed decisions and feel prepared for approaching investors, retailers and distributors.
BevSource is an integral partner to turn your winning formula into a profitable beverage. With over 20 years of experience scaling beverage companies, trust us to translate your concept into a precise financial model. Having a strategic financial approach enables beneficial negotiations with co-packers and suppliers, streamlines the supply chain and ensures sufficient capital.
What to Expect With BevSource's Financial Modeling
When you partner with us, you'll get:
Once you’ve identified your co-packer, you can start to add up all of the direct and indirect costs that go into your beverage and develop your estimated per-case cost or Cost of Goods Sold (COGS). This number influences your price point, margin and business viability, so all of your costs must be accounted for.
Many variables and considerations go into your cost of goods sold. BevSource walks you through each input and touch point, and the fixed and variable costs associated with each.
A cash schedule outlines how much cash you'll need to have ready at various points in your production, so you can line up your finances accordingly and be prepared to meet your business's cash requirements. From one-time fees, like print art setup fees, to recurring outlays like ingredients, freight and warehousing, your cash schedule helps you understand the total cost for each run of your beverage and how it breaks down between suppliers and orders.
Achieving optimal profit margins requires a successful beverage with consistent taste, cost-effective packaging and efficient production standards. BevSource will review your expenses to optimize your beverage formulation and production. We leverage our network of pre-vetted suppliers across North America to suggest alternative sourcing or packaging options that improve your profitability.
Get Insight Into Your Beverage Development Costs With BevSource
Ensure your beverage company is financially successful with our financial modeling services. Contact BevSource for more information or request a quote today.
Frequently Asked Questions
Starting a beverage company requires these steps:
- Concept validation: Evaluate your beverage idea against the market to understand how to differentiate your product.
- Commercial formulation: Partner with a beverage formulation expert to develop your formula and review ingredient specifications.
- Precise financial modeling: Determine the costs of your beverage at each stage to calculate a competitive, profitable price.
- Sourcing: Source beverage ingredients to optimize the flavor profile and packaging that helps promote your brand to customers.
- Mass production: Partner with a co-packer that can make your product to spec, within budget and scalable for distribution.
Many variables affect the timeline — financial planning, ingredient sourcing and co-packer availability all dictate your speed to market. Since there are many steps involved in getting your beverage shelf-ready, launching a new beverage can take as long as 9 - 18 months from initial concept to full market launch. Working with an expert development partner like BevSource can help accelerate the timeline, help lower your costs and make the most of your funding.
Starting a beverage company entails formulation, development and production costs, usually ranging from $100,000-$300,000, which largely depend on the nature of the beverage and the scale of the business. This cost does not include marketing, staff, business premises and other related running expenses.
Beverage formulation costs range from $20,000-$45,000 to develop a beverage formula you can take to a co-packer for production. The total cost depends on the type of beverage and the number of SKUs being formulated. Investing in a small-scale pilot production run will also impact your costs. A pilot run costs between $15,000-$25,000 for a single day’s pilot production, depending on the number of SKUs, volume, complexity of the blend and testing requirements. Full-scale production of 10,000 cases will cost around $200,000.
These values are estimated costs, since factors like the number of SKUs will influence the final costs.
Some certifications and licenses you'll need to launch your beverage brand include:
- Alcohol and Tobacco Tax and Trade Bureau Basic Permit for alcoholic beverages
- FDA Food Facility Registration for food safety compliance if you own or operate a covered facility
- Sales tax permit for legal sales
- Health department approval for compliance with food safety standards
The exact certification you need depends on your business activity and state law.
The price point for your beverage will depend on the costs involved in optimizing your product, including:
- Ingredient costs: The number of ingredients, the ingredient cost per unit and the size of the beverage container will influence the cost of ingredients.
- Packaging costs: Aluminum cans, plastic bottles and other containers have different costs per unit, and adding a design influences packaging costs as well.
- Manufacturing costs: Beverage companies partner with a co-packer to produce the finished beverages. These costs also include specific processing that some beverages require, such as pasteurization.
All of these factors go into your cost of goods sold. Determine your cost of goods percentage by adding the costs of the used product, then dividing that value by the cost of the sold product. The ideal percentage varies based on the type of beverage. BevSource can review your cost of goods sold and help you calculate a profitable price point for your beverage.
