written by Khatabook | February 14, 2022

Guide to Starting a Soft Drink Business In India

A beverage business, without a doubt, is profitable due to the large number of consumers it may serve. However, there is no denying that launching a beverage company is fraught with complications and restrictions.

According to Goldstein Market Intelligence, India's packaged non-alcoholic beverages market is expected to increase at a CAGR of 16.2% from 2017 to 2030. Furthermore, as more individuals switch to cold drinks, the market is expected to reach ₹150 billion by the end of the projection period. 

The non-alcoholic beverage sector in India like squashes, fruit juices, soft drinks, aerated waters, mineral waters, and syrups has grown significantly in recent years. Soft drinks are a type of non-alcoholic beverage that is generally but not always carbonated and contains a natural or artificial sweetener, edible acids, natural or artificial flavours, and sometimes juice. Natural flavours are produced from fruits, nuts, berries, roots, herbs, and other plant sources; popular soft drinks in India include Bisleri, Maaza, Sprite, and Frooti.

India's population is growing, as is the economy, and as a result, so is the need for food and beverages. The beverage industry in India has a major potential for growth, thus involving in this business would be a fruitful venture. Read on to know more about the regulations for launching a soft drink business in India, as well as how to collaborate with wholesale cold drink distributors in your area.

Did you know?

India is one of the world's largest consumer markets, with 1.3 billion people, and it is also one of the youngest, with over half the population under the age of 25. Therefore, operating a cold drink agency near you could be a profitable venture.

Business Plan for Cold Drink Production

The most crucial component of this business is creating a foolproof business strategy. To do so, you must first perform market research. Recognise the market's needs and then decide on the specific product you'd like to make.

Determine how much money you'll need to get started. Both fixed and variable expenses must be calculated. Create a strategic collaboration with the cold drink dealers in your manufacturing area and develop a marketing and distribution plan for the product.

What's the Cost of Starting a Cold Drink Manufacturing Plant?

Depending on the production capacity, the cost of a carbonated soft drink automated factory with one pair of machines will range from ₹20 lacs to ₹50 lacs. The cost will drop to roughly ₹10-15 lacs with a semi-automatic machine.

You'll also need to put money into the land, inventory, legal fees, labour, and three months' worth of working capital. To start a soft drink manufacturing factory in India, a total investment of ₹30 lacs to ₹1 crore will be necessary.

Also Read: Effective Steps To Start A Beverage Business

What all is required for Cold drink Manufacturing?

Some of the necessary requirements for starting a cold drink distributorship are:

  • Raw Materials

Depending on the type of soft drinks you provide, you'll need a variety of raw ingredients to create a beverage. Water bottles play a vital role in the beverage production process. Similarly, your factory should have an ample supply of fresh water. After all, a well-managed inventory and a smooth supply chain ensure that production is scheduled and completed on time.

A cold beverages production facility may require raw components such as sugar, preservatives, carbonated water, and artificial flavours. So, fruit orchards must be located near the facility to assure a steady supply of fresh fruits.

  • Infrastructure

Choosing the right site is critical when establishing a beverage manufacturing facility. Most factories are placed on the outskirts of cities to avoid environmental health dangers. However, in other cases, such as a cold drinks factory, particular consideration must be given to developing a cutting-edge modern manufacturing facility with high-speed technology.

  • Machinery

After the proper infrastructure has been established, the next key consideration is proper tools and machines. It has been noted that business owners prefer simple, less expensive machinery to minimise costs, particularly in the manufacturing industry. When building up a production operation, however, one must never compromise on the quality of the machinery.

At all times, it must be ensured that high-quality machinery and sophisticated tools and equipment are used in the factories, such as mixers, refrigerators, compressors, blending systems, carbo coolers, and more.

  • Processing

Every beverage processing procedure is unique, and it is this approach decides whether the beverage is a success or a failure. It's also crucial to confirm the safety of the beverage's formula before it is put into production.

  • Marketing and Branding

The use of appropriate marketing and branding tactics is crucial to a beverage company's success. An appealing logo should be used which allows the public to connect to the brand's concept strongly. Furthermore, selecting the right advertising firms and brand ambassadors is crucial in giving a brand significance. Packaging is another component that people consider when choosing a brand.

  • Selling

A robust sales strategy is essential in the beverage sector. You must understand that, based on the nature of your business and the sorts of drinks involved, you must market to the appropriate wholesalers, direct sales, or e-commerce platforms. Another essential element that must be thoroughly evaluated is pricing. Because the beverage sector has high marketing and overhead costs, it is vital to have large margins in production and selling prices.

What about Cold Drink Distributorship?

Cold drinks are widely available in grocery stores, restaurants, movie theatres, and dedicated soft drinks stores, among other places. Offering clients the brand and flavours they want is the key to a successful cold drink retail business.

Along with the old carbonated soft drinks, several merchants explore energy-infused drinks, improved waters, or iced teas. To suit the needs of consumers, you, as a cold drink store, must offer a wider selection of soft drink options..

What Should you do to Start a Cold Drink Distributorship?

Retailers in the cold drink market must understand brand memory, flavour, value consciousness, and other factors influencing their customers. You must first complete the documentation for your business before applying to be a cold drink retailer. Depending on how you wish to manage your business, you can register as a private limited company, a corporation, a partnership, or a sole proprietorship. The franchisor company will inquire about the nature of your business, and you will be required to supply information such as your firm's name and nature.

Starting a Cold Drink Agency in India

  • Find Out More About The Brand

All top cold drink companies' websites provide information on the company's history, ethics, marketing techniques, current news, and plans. To become a retailer, you must first become acquainted with the many items they sell before selecting what is best for your business. On the website, you may also find useful articles about expanding your retail business and the benefits of collaborating with the company.

  • Look into Product Offerings

To check the product list, look up the company's website. Major cold drink companies are available for coffee, dairy goods, juices, energy drinks, and other varied products. Visit other stores to see any gaps in the inventory that you can fill.

  • Identify Your Target Audience

You must identify the exact demographic that would be attracted to your cold drinks. Then, in order to target those customers, analyse their purchase habits and design the appropriate marketing approach. You can use a range of market survey tools to target your audience.

  • Apply for a franchise on the cold drink brand's website

You can apply to become a franchise after choosing a certain cold drink brand. You can now apply for a dealership on the internet. All you have to do is go to the company's website and complete the business inquiry form.

Alternatively, if there is a tab for 'application for the dealership,' you can click on it and select the item for which you wish to apply for a dealership, then follow the website's steps before hitting the 'submit' button. This will generate a new business request form in the near future.

  • On-Boarding

You will receive a call from a sales consultant of the cold drink firm shortly after completing the online application form. This representative will provide you with information about the nearest bottling factory, ask you a few questions, and explain the company's policies. It will assist both of you in determining if you are a good match or not.

  • Marketing Strategy

Soft drink companies use celebrities to serve as brand ambassadors and run large-scale promotional activities. Shop keepers who sell carbonated and non-carbonated cold drinks, such as juices, will have a significant edge and make a lot of money from popular products. When it comes to cold drinks, it's the brand memory that drives sales. 

  • Sale Strategy

Associating with any big brands will benefit you because they spend a lot of money on advertising. Combining cold drinks with food is a nice idea. For instance, if a consumer orders a steak, he will receive a free soft drink, or if he orders a pizza, he will receive a soft drink at a discount. To appeal to your customers, you must choose the correct visuals and product style and express that message throughout your store.

Also Read: Secrets to understand before starting a cold storage business

Conclusion

Engaging in the beverage industry is lucrative for both the manufacturer and the distributor. The workflow of a cold drinks business has been described in this blog. Anyone interested in starting a soft drink manufacturing business or becoming a cool drinks distributor can obtain a solid grasp of how things function. 

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FAQs

Q: How much does it cost to produce a refreshing beverage?

Ans:

Cold drinks such as Pepsi, Thums Up, Sprite, Limca, and Coca-Cola cost between ₹1.50 and 2.00 per litre. As a result, a 250 ml soft drink beverage will cost ₹0.50.

Q: How do I register my beverage firm in India?

Ans:

You must register your cold drink company with the FSSAI and obtain a Food Safety License for Bar Beverages.

The following licences are also required:

  • Registration of a trademark (optional)
  • GST No.

Q: Is the soft drink industry in India profitable?

Ans:

The most popular soft drink glasses range from ₹15 to ₹20, with 50 to 60% profit margins. If your cold drink agency can sell 300 glasses of ₹15 per day, you can make between ₹4,500 and ₹5,000 per month, which is around ₹1,20,000 profit.

Q: What is the profit margin in the cold drinks industry?

Ans:

The profit margin on cold drinks ranges from 10% to 20%.

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