How to start a drinks business: a step-by-step guide

Fever Tree, Brewdog, Innocent Smoothies – the UK beverage market has seen its fair share of disruptors and innovative brands emerge in recent years.

With so much competition, starting a business in this industry would be tough, especially when going head-to-head with well-established brands. However, with the right game plan, creativity and persistence, you can still carve out your own space and build a loyal customer base.

Our guide below will walk you through all the essential ingredients you need to brew up a successful drinks business.

How to start a drinks business: step-by-step

From figuring out what kind of drink you want to make to getting it into customers’ hands, there are a few important steps to follow when starting a drinks business.

You’ll need to create a unique product, build a brand that stands out, choose the best way to produce it and market it in a way that grabs attention. No matter what kind of drink you’re aiming to launch, these steps will help you get your business off the ground and growing.

Step 1. Find your niche

First things first – you’ll need to figure out your target audience and your niche in the market.

For this, you’ll need to conduct market research to understand customer needs and preferences, identify trends and assess competitor offerings. This will help you pinpoint any gaps in the market and allow you to tailor your product to meet the needs and desires of your ideal customers.

Here are a few tips to help you with your market research.

Research current trends

Look at what’s currently popular in the drinks market. You can do this by checking out reports from sources like Mintel, IBISWorld or trade publications like The Grocer or Beverage Daily. Think about health trends such as low-sugar, organic and plant-based options. You should also watch social media platforms, influencers and bloggers to see if there are any emerging trends or ideas.

Find gaps in the market

Check out what your competitors are offering and find areas where they might be lacking or under-served. Is there something they aren’t focusing on that could be a unique opportunity for you? You could also ask potential customers if anything is missing from the drinks they love or what they’d love to see more of.

Decide your product

You should decide what kind of drink you want to create, whether it’s energy drinks, healthy juices, cocktails or something more unique like kombucha or CBD-infused drinks. 

Keeping an eye on trends can help you spot gaps in the market. For example, if organic or low-sugar drinks are popular right now, you could focus on creating a drink that combines these trends with unique ingredients, new flavours or sustainable packaging to make your product stand out.

Case study: IMPOSSIBREW

A returning entrant for the Startups 100 for 2025 Index, IMPOSSIBREW creates beer with a buzz, but no hangover - setting it apart from the “well-behaved” beverage market.

Read their story

Understand your customers’ needs

Conduct surveys, interviews or social media polls to gather insights into what your target audience is looking for. What do they care about when choosing beverages? (e.g. health benefits, flavour, sustainability, etc.). Have a good understanding of the age, gender, lifestyle and values of your ideal customer. For example, are they fitness enthusiasts, busy professionals or health-conscious parents?

Test your ideas

Experiment with different flavours, ingredients, or product concepts. You could even host small focus groups or gather feedback from friends, family or social media followers. Try out your product at local markets or events to see how people respond and then refine your offerings based on customer feedback.

Check out the competition

Look at successful brands and what makes them stand out. Try to find areas they’re succeeding in, and where there might be an opportunity to improve or differentiate yourself.

For example, if a competitor is offering a health-focused drink but lacks sustainable packaging, you could target eco-conscious consumers by offering a product that’s both healthy and environmentally friendly.

Factor in dietary and lifestyle trends

Consider offering products that cater to specific diets like vegan, keto or gluten-free. These niche audiences are often loyal and look for beverages that meet their needs. As consumers become more health-conscious, they are increasingly looking for products that align with their lifestyle and dietary choices.

Step 2. Write a business plan

As with any business, taking the time to create a thorough business plan – which details everything from your ambitions to your financials and marketing strategies – will put you in good stead to succeed. Your business plan should cover:

• Your vision and mission statement for the business
• Profiles of your management team, highlighting their experience, credentials and connection to the product
• Detailed financial forecasts – go beyond just sales and profit projections. Explain how you’ll achieve those numbers, as investors and lenders will expect clear strategies.
• A breakdown of your product pipeline, sales and marketing strategy and operational process – from customer orders to cash collection.
• Resource planning – identify the skills and expertise your business will need, such as accounting, legal support, or marketing experts.

Step 3. Start developing your product

Now that you’ve figured out your niche and target market, it’s time for the fun part – developing your product. This is where you’ll turn your business idea into a real beverage that people want to buy. For this, you’ll need to:

• Create your recipe: start experimenting with different ingredients and flavours to get the right balance. Think about taste, texture and whether your product fits with popular trends (e.g. low-sugar or plant-based).
• Test samples: once you’ve got a few options, try them out with friends, family or a group of potential customers. Their feedback will help you tweak the product until it’s spot on.
• Find suppliers: look for good suppliers who can provide quality ingredients at the right price, as this will help ensure your product stays consistent.
• Consider your packaging: your packaging should catch people’s eye and match your brand’s vibe. Make sure it’s functional, looks good and follows any legal requirements.

Step 4. Build your brand

Next, it’s time to build a brand that people can connect with. Your brand is more than just a logo – it’s how your customers feel about your drink and what they associate it with. Good branding is what helps your business stand out, build trust with customers and create an emotional connection. 

Here are the most important considerations for developing your brand:

• Create a strong identity: define your brand’s personality. Is it fun and quirky, sleek and modern or health-focused and eco-friendly? Your branding should reflect your core values and resonate with your target audience.
• Design a memorable logo and packaging: your logo and packaging need to stand out on shelves and online. Make sure it’s eye-catching, easy to recognise and consistent with your brand’s personality.
• Develop a brand story: people love a good story behind the brand, and it can help build a stronger connection with your audience – whether it’s your passion for healthy living or a mission to make a difference.
• Define your voice: this is how you communicate with your audience. Are you casual and friendly, or more formal and professional? Make sure to stay consistent with how you talk to your customers, whether it’s on your social media, business website or in marketing materials.

We’ve also listed a quick breakdown of the best branding practices and mistakes you should avoid.

Step 5. Determine your production strategy

This is when you’ll need to figure out how you’re actually going to make your beverage. This step is all about choosing the best way to produce your product at the right quality and scale.

First, decide whether you want to produce drinks in-house or partner with a co-packer (a contract manufacturer). In-house production gives you full control but requires more investment in equipment and staff. On the other hand, co-packing can save you time and resources but also means giving up some control over the process. 

Next, consider your production volume. You should start small to test your product but also plan for how you’ll scale as demand grows. Therefore, you should make sure your production process is flexible enough to handle increased orders without sacrificing quality.

And finally, focus on supply chain management by building relationships with reliable suppliers that can deliver ingredients and packaging materials consistently. Having a smooth supply chain will help you avoid delays and ensure your product is always available when customers need it.

Step 6. Bring it to the market

Once your product is ready, it’s time to introduce it to the world and get your drink in the hands of customers. Marketing is a huge step for any new business, so here’s how you can effectively get the word out and create buzz around your brand.

Start small

While you might look forward to seeing your product stocked on the shelves of supermarket giants, it’s better to start small and work your way up. You can start at local farmers’ markets, cafes, gyms or events to get the word out. That way, you can gather feedback and build a loyal customer base before expanding.

Develop an online presence

For this, you should set up an online store or even use platforms like Amazon to sell your products. Make sure to leverage social media as well, so that you can engage with customers on platforms like Instagram, Facebook and TikTok by showcasing your products with photos, videos and stories.

Additionally, make sure to use search engine optimisation (SEO) practices to make sure your website ranks well in search engines. Use relevant keywords in your product descriptions, blog posts and meta tags to help potential customers find your drinks online.

Build retail relationships

Once you’ve built some traction, consider getting your product into local shops and supermarkets. You can approach smaller retailers first to test the waters before reaching out to bigger chains.

Offer samples and promotions

Offering free samples or discounts can help attract customers to try your product. Whether it’s through giveaways, tasting events or promotions, getting people to try your drink is the first step to building repeat business. Remember to listen to feedback as well – whether it’s positive or constructive – so that you can refine your offering and improve the customer experience.

Rules and regulations for running a drinks business

There are several rules and regulations that you must follow to ensure your products are safe, legal and compliant. 

The key regulations you need to consider are:

1. Business Registration

You must register your business with Companies House if you’re setting up as a limited company. If you’re running as a sole trader or partnership you’ll have different registration processes, but you’ll still need to inform HMRC.

Additionally, you will also need to register for VAT if your taxable turnover exceeds £90,000 for the last 12 months.

2. Food Standards and Safety

Your drinks business must comply with the UK’s Food Safety and Hygiene Regulations, which are governed by the Food Standards Agency (FSA). This includes ensuring your product is safe for consumption and meets the required hygiene standards.

3. Labelling requirements

Beverage products must have clear and accurate labels in accordance with UK food labelling laws. This includes:

• A list of ingredients
• Allergen information
• Nutritional information (if applicable)
• Best before/use-by dates
• The name and address of the business

If your product contains alcohol, it will need additional information, such as the alcohol by volume (ABV) and responsible drinking messages.

4. Packaging and environmental considerations

Packaging for your drinks must comply with UK packaging waste regulations, meaning you need to ensure that your packaging can be recycled or reused, and you may need to join a producer compliance scheme to manage your packaging waste. 

Make sure to consider the environmental impact of your packaging, as sustainability is becoming increasingly important to consumers and regulators alike.

5. Alcohol regulations (if applicable)

If you’re selling alcoholic beverages, you must comply with the Licensing Act 2003, so that your product is sold legally. You will also need to comply with alcohol duty regulations and pay excise duty on alcoholic beverages, which is a tax on alcohol production or importation.

Conclusion

The drinks industry is extremely competitive, with over 6,800 companies in the sector. Therefore, you’ll need some careful planning and significant effort to make it work.

By following the steps in this guide, you can create a drink that your customers will love, build a strong brand and figure out the best ways to produce and market your product.

The key is to understand your niche, do your research and keep refining your product to stay ahead of the game. With this, you’ll be in a great position to stand out in a crowded market.