Non-Alcoholic Mixer - Product Idea

[MustachioedPistachio]

Hi everyone!

At the end of 2020, I quit drinking booze. I don't miss the drunkenness...but I do really miss the array of delicious flavors. I am a huge fan of bitter, spicy, peaty, herbaceous, or otherwise intense flavors in cocktails or neat pours. Negronis, pastis, scotch, etc.

I tried some non-alcoholic, ahem, "substitutes". I never waste food, but for these I actually had to make an exception. Terrible. The most egregious offender was an alcohol-free pastis. *gag*

Anyway...lately, I've had a strong hankering for one of my favorite go-to after-work cocktails. Fireball and zero-sugar ginger ale. It had a decent kick and enough sweetness to be dangerous (it was). 

I decided to make it happen, sans alcohol, of course. I managed to develop a super tasty recipe that is WAY better than the original Fireball component. Tingley, tantalizing, and tasty without the hangover and all of the kick. I was so impressed with it I actually brought some to the office to share with some cocktail enthusiasts. They were blown away!

So, inspiration struck: I am considering launching a non-alcoholic mixer product. More like a concentrate or additive. Think bitters, grenadine, or syrups but with a 2 ounce serving size for mixing. It could be consumed on its own...but that would be too intense. It would come in 8-12 ounce bottles for 4-6 servings per bottle.

Some background.

I owned and operated a couple of small businesses before. Both were successful but ultimately not my cup of tea (or cocktail). One was hotel development and management. The other was quick service restaurant chains. Sold both for a tidy profit. I also have experience with a smattering of small-scale entrepreneurial pursuits: selling bubble gum and candy in middle school, installing vending machines in high school, tutoring, consulting, lawn mowing, etc etc etc. I've also tried and failed launching businesses numerous times. Point is, this won't be my first rodeo. My primary profession is finance and accounting.

I've dealt with perishable inventory before but immediately turned over and consumed "on-site". I've dealt with medical device inventory before but only from the perspective of accounting / finance in a midsized, established company. Inventoried, consumer products are new for me.

The numero uno lesson I've learned (again, and again) over the past couple of decades: start small, scale smart.

Here's what I'm thinking for short-term goals, within the next month:

• Rework my recipe to get cost down and use more raw ingredients; should at a minimum unalter the flavor or enhance it
• Source packaging so I can start getting it into folks' cups
• Figure out if there is a market for it

Any further business planning is moot if there is no viable market. 

I think there is. More and more people are going alcohol-free, yet, like me, still want something fun to drink. I also think this concoction will appeal to regular cocktailers - it will add significant oomph to mixed drinks. I've not seen anything like this on the shelves or online.

What are your ideas for getting this out there for people to try? Ideas / process for actually getting folks to buy it?
 
So, dear forumites, while I am testing out the market locally, what are some of the 'gotchas' I need to heed, especially during early stages? Here are some of the questions I have floating around as I consider this venture.

• Starting out, this mix will be truly homebrew. I would not consider expanding out of the home until it makes economic and lifestyle sense. Would this significantly hamper or even rule out selling through major distribution channels (Amazon, supermarkets, etc)? Not so much from a capacity standpoint, but rather that of supplier quality?
• I would like to eventually sell and fulfill orders digitally. This sounds like it could quickly become a logistical nightmare, especially considering most customers *likely* would be ordering a bottle or maybe a 4-pack at time. How would I get dozens of orders from my apartment (!) to USPS / UPS / FedEx? Like, do I just drop off a ton of packages at my local post office? Do I create a website with Shopify? Shoot for Amazon early?
• Food labeling and regulations. All new to me. I think I can figure out UPC, Nutrition label, ingredient list, but what about Best by dates? Manufacture dates? Would I proactively have those printed on product labels, or do they need to be marked on the bottle itself?
• Food safety. I am familiar with fresh foods. I am not so familiar with bottling. The mixture would be brought to a boil during processing. Do I bottle after it's cooled a bit? How do I ensure it's shelf stable? How do I ensure it won't leak or explode? Is Best By date a best guess? Same for "Consume within...". The main ingredients are water, sugar, and spices / extractives.
• Liability. IF this thing gets traction, I will set up an LLC and purchase some umbrella insurance personally. What other insurance should I consider for the business?
• Is the juice worth the squeeze? Is this something that will have to have massive scale (automation, machinery, etc) to make it worth the time and effort? What is a reasonable margin range to expect? Once I get the recipe to a good enough spot, I'll have a better idea of product cost per ounce. I can then compare to mid-tier products (like, say, Fever Tree) to estimate target sale price.

Any and all feedback would be most welcome.

[Archipelago]

If I have your idea pegged right, I'm thinking your idea is a 'mocktail' type product. Like virgin margarita or something like that you'd buy at a bar. But something you can make at home.

There are some holes in your idea that I can poke through:

1. Liquid beverage distribution is not e-commerce friendly. I've owned and operated an Amazon distribution company for 7 years. You're not making money on a bottle of product that sells for $10 or less. There are too many fees to make it economically feasible. You'd actually be losing money. The only way to make money on items under $10 is small and lightweight products with a landed cost of $2 or less. Even then, the profit margins get razor thin in a hurry especially when you add in the costs of advertising.

2. One problem I foresee with your idea is if there's any dependence on sugar. How much sugar does your mix have? Is it processed sugar or natural sugar? Sugar is everywhere you look. How would you differentiate your product from everything else that contains sugar?

3. Are you able to formulate your product with powder instead of liquid? That would certainly get your distribution costs down.

4. I should also mention about Amazon since Amazon is where my experience is...food is a category that can get you in hot water if you get any customer complaints. If an Amazon customer complained that the product gave them a stomachache, Amazon can shut down your listings entirely. It doesn't matter whether the complaint is valid. Amazon rules with an iron fist and will be breathing down your neck every time a complaint comes through. That's why a lot of Amazon brands deal with products that aren't consumable or can't hurt somebody.

Our household buys green tea packets that mix with water. We buy this product over and over again because all there is to it is filling up a pitcher with water and adding 1 packet. There's no sugar. It's the only beverage we have in the house practically 99% of the time. Each box makes 3.5 gallons of green tea. We buy 8 boxes for $25. That's 28 gallons of green tea for $25 which comes out to less than $1 per gallon. Better yet, it's 28-gallon sized plastic containers NOT used. This is an incredible value from a monetary and environmental standpoint. A product like this is very hard to beat.

https://www.amazon.com/4C-Pitcher-Refreshing-Flavorings-Packets/dp/B0843JPXKV/

I can see an idea like this sticking if you did it on a localized basis, treated it as a craft, supplied bars with it, etc. But it sounds like you have scaling in mind, and this is a niche that is very competitive and difficult to scale online.

[MustachioedPistachio]

*snip*

There are some holes in your idea that I can poke through:

*snip*

Excellent feedback - thank you! Particularly on Amazon ruling with an iron fist. My mixer would likely have a barbell taste preference, like licorice. People will hate it or love it, and I could easily foresee someone complaining about it if it's not their thing...hmm...

[halfling]

*snip*

There are some holes in your idea that I can poke through:

*snip*

Excellent feedback - thank you! Particularly on Amazon ruling with an iron fist. My mixer would likely have a barbell taste preference, like licorice. People will hate it or love it, and I could easily foresee someone complaining about it if it's not their thing...hmm...

As a card carrying licorice hater, just make sure not too use misleading flavor descriptors. Nothing worse than buying something online described as "herbal," imagining rosemary, and getting licorice.

I really like Ghia on occasion. It's a bitter non-alcoholic mixer and they carry it in my local Non Alcoholic shop. They recently changed their business up a bit so that now they sell a much more concentrated liquid for a slightly higher price, but based on the reply above it seems it might be saving them on shipping.

[PoutineLover]

I like the idea a lot. I can't drink due to pregnancy and I know a lot of other people who don't drink and it's a struggle finding tasty and flavourful drinks that aren't loaded with sugar or artificial flavours.

One thing to consider based on the previous comments is whether you could make it a dry flavour packet that gets mixed with liquid instead? Solves the shipping concerns. Alternatively, local markets or restaurants or bars until you have a robust market and then maybe scale up to online retailers? If I came across this product I would probably be interested.

[Dicey]

If this guy could do it, so "can" you.

https://marcom.com/liquid-death-making-a-dumb-idea-profitable-with-great-branding/#:~:text=He%20had%20a%20chance%20to,can%20per%20their%20sponsorship%20requirements.&text=Between%20this%20experience%20and%20Cessario's,brand%20was%20born%20in%202018.

Related: my brother's in the wine and spirits biz. At Christmas he gave us a taste test of some new fake whiskies and they were gross. I've been a vegetarian for 35+ years and I really appreciate complex flavors, but these weren't it. Ugh.

[MustachioedPistachio]

I've let this steep for a while and decided the juice isn't worth the squeeze.

My recipe enhancements actually made it slightly worse, ha. So, I'll just enjoy sipping on it from time to time :)

Interestingly, I came across a similar concept at Sprouts the other day. It was a cocktail "tea" mixer. It was expensive. I think it was this brand.

[WayDownSouth]

If you want the honest truth from my perspective, you're better off with a licensing deal.

1.) Perfect your product (ingredient quantity, taste, consistency, etc.)
2.) Do a little market research and cost analysis - you don't need to pay someone for this but you can if you want. You seem savvy enough. The purpose of this being step #2 is to see if the rest of your steps are even worth going through.
3.) Get a PPA (this is a provisional patent application which serves as a protection for your invention while buying you time to market it, and they are MUCH cheaper than worrying about patenting).
4.) Once you've completed 1 through 3, market it direct to the companies/brands/manufacturers that have the time, money, experience, and equipment to turn your invention into a reality. Your PPA will protect them from stealing your idea during negotiations and/or presentation, however a NDA is another good idea to supplement it. By "marketing" it directly to companies, I'm not talking about ads, etc... I'm talking about doing the research, cold calling, making contacts, getting ahold of product managers, product development leads, heads of product sales, even CEOs at times. It all depends on the situation.

Your end goal is: Close a contract where 1.) the company does ALL of the work. They pay you a small percentage (per piece, per amount of profit, etc. depending on your deal) to literally RENT your idea. You include within the contract that they must pay for your fees to patent the product. They will pay you your money every X amount of units produced, or every X number of units sold, or every X months (regardless of if it sells or not) or, every time sales reach a certain point. You can negotiate all of that.

At the end of the day, your rented idea generates you money for no work once complete. Overall investment was your R&D (in-home) and the PPA plus other extremely minor costs (such as paying a graphic designer to create a mock-up ad, label, etc. to aid your presentation(s)).

Good luck. If you go at this alone you'll probably have a very rough time getting your feet off the ground. Proof of this can be found in the massive turnover you see in "new" products from beverage makers. They're always trying out new shit and holding onto what sticks. Competition in that industry is fierce but your idea is worth the time of doing what I explained above, not much more unless you like to lose money.

[Missy B]

You can't license an idea.
You can license a brand, or a patent. Or a product. Or a copyright.
But not an idea, which has no legal protection until it is transformed into a brand, a patent, a copyright...
 It's important when you go into negotiations that you understand what exactly you are licensing.
Nolo Press has books on licensing, I would look through the titles until you find the ones best suited and read them carefully.
And there's a massive licensing convention in Vegas once a year, I would go to that to see the possibilities.

[erp]

Maybe consider reaching out to a local brewery or distillery - at least here they're super excited about non-alcoholic drinks (it's a super fast growing market). Even just having a place that serves it at their brewpub might be enough to make it worth your while.

It depends a bit on if you're trying to get real rich, or just share a cool thing you designed for a bit of bonus money.

[Bartlebooth]

We bought a product exactly like this at a street fair last week.  Found it: https://summerlakesbeverage.com/product/luna-paloma/

$22/bottle which makes 12 drinks, mix with club soda.  The refreshing free sample on a hot day drew DW in so fast.  Super high quality booth setup and great salesmanship too.  That guy knew exactly what to say.

Apparently shipping is profitable if you ship $140+ as your minimum SKU!  But you could rake in a lot of money selling it for $22/bottle in person at events.

[Telecaster]

You can't license an idea.
You can license a brand, or a patent. Or a product. Or a copyright.
But not an idea, which has no legal protection until it is transformed into a brand, a patent, a copyright...
 It's important when you go into negotiations that you understand what exactly you are licensing.
Nolo Press has books on licensing, I would look through the titles until you find the ones best suited and read them carefully.
And there's a massive licensing convention in Vegas once a year, I would go to that to see the possibilities.

I wouldn't bother licensing.   For one, it is pretty hard to patent a recipe and/or develop a brand.   But mainly, no one will want to license a product unless there is an established market for it.   If they think there might be a market, they aren't going to risk their capital on your brand, they'll create something similar on their own and save the license fees.

Contract bottling on the other hand is a whole different beast.   Contract bottling is extremely common in the beverage industry.   Even a lot of big brands don't manufacture and bottle their own products.  There are tons of small and mid-size bottlers that are happy to make and bottle whatever you want.    Of course, in this scenario you are the one putting the capital at risk.   

That said, I think the NA adult beverage market is wide open.   I'm starting to see a lot more of it, and I think this is just the tip of the ice berg.   

[FLBiker]

Here in Nova Scotia, the NA drink (and bar) market seems to be booming.  As a sober person (18 years and counting) I totally don't get it.  I just drink water, black coffee and tea.  If I'm feeling really fancy, maybe a can of flavored seltzer.  I can't imagine going to a bar and paying booze prices for not-booze.  That said, there definitely appears to be a market for it.  I've learned that I'm a terrible arbiter of what will become trendy.

[Chris Pascale]

Friend who quit drinking got into "functional beverages" which I've given a try and enjoy.

I liked this one a lot, but that "kiss of melatonin" knocked me the hell out, so won't buy it again: https://www.amazon.com/dp/B084YPNP2Y?ref=ppx_yo2ov_dt_b_fed_asin_title&th=1

This one I would buy again - goes really nicely with a small can of ginger ale: https://www.amazon.com/dp/B07PPPM43F?ref=ppx_yo2ov_dt_b_fed_asin_title