Launching a Soft Drink Is a Hard Business
The cola kings won't want your idea, but some smaller players may
Q: I've got a great idea for a new soft-drink product. Can you help me find
out who to contact and how to sell this idea?
--D.T., Cottondale, Fla.
A: Experts say you might as well forget about pitching your product to soft-
drink giants like PepsiCo or Coca-Cola. These corporations have in-house
product developers working around the globe full-time, doing nothing but
dreaming up new soda formulas. It's more than likely that they've discovered
your recipe already, and it's either in development, is being test-marketed, or
has been tossed on the discard pile. Because of the enormous time and
expense involved in a new-product launch, mega-corporations nearly always put
their money behind ideas they've developed internally, experts say.
"It's virtually impossible for a company like Frito-Lay, Kraft, General
Foods, or PepsiCo to launch a new product without the expectation that it
will generate $100 million in first-year sales, because they have to put $20 million
to $30 million into launching it," says Ed Engoron, president of
Perspectives/The Consulting Group, a Los Angeles-based concept development
and marketing research firm specializing in the food and hospitality
A better strategy for you would be to approach independent bottling companies
or perhaps a local dairy to see if they are interested in your soft-drink
idea. Look for companies already producing similar but not directly competing
products, companies that have the capacity to produce your soft drink without
having to make large investments in new manufacturing equipment. Try to find
companies that have synergistic products already on the market -- maybe iced
teas or fruit drinks -- but nothing in the carbonated soft-drink niche. A
company like this may be eager to expand into a related market but short on
staff to devote to new-product development.
Of course, before you break down your formula for a manufacturer, make sure
it is legally protected by patent and/or trademark. Entrepreneurs should not
reveal any original idea without securing the intellectual-property rights to
it first, or they will have no legal recourse if it is stolen. And you
probably will not be able to interest anybody in the idea unless you've done
solid test-marketing and you can put some numbers behind your contention that
this is truly a great idea -- one that generates substantial, positive
consumer reaction. Customers are pretty loyal when it comes to their favorite
sodas, remember, so you'll need to demonstrate that your product is so
terrific and unique that it will capture a share of a crowded, competitive
If you can afford it, you might do well to hire a new-product consultant who
specializes in the food and beverage industry. These companies have
laboratories and kitchen facilities and can help you refine your formula,
figure out how to produce it in large enough quantities to make it
profitable, run taste testings, and do large test-marketing surveys for you.
They'll also give you an objective analysis of your idea. If they believe in your
product, they will also help you make contacts with producers that will lend
you the credibility you will need.
One last piece of advice on the food industry in general that may be helpful:
"When it comes to new formulas, I'd advise you to try for ingredients that
are as fresh and natural as possible, particularly using fruit and vegetable
derivatives. We're not in the era of 'better living through chemistry'
anymore," Engoron says. "People are looking for fresh, all-natural products.
You see it from the upgrading of fast-food menus all the way up to the
white-tablecloth restaurants. It's a trend that's very pervasive."
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