How to Start a Profitable Canned Cocktail Business: A Complete Guide

Do you dream of bottling up delicious cocktails to share with the world? Starting a canned cocktail business is an exciting venture, but also requires a lot of hard work and perseverance. If you have a passion for mixology and an entrepreneurial spirit, launching your own line of ready-to-drink cocktails can be a rewarding challenge.

In this guide, we'll walk you through the essential steps to get your canned cocktail business up and running:
•Developing your signature cocktail recipes
•Finding a co-packer to produce your drinks
•Designing eye-catching packaging and branding
•Navigating regulations and obtaining proper licensing
•Marketing your new product to attract customers
•Expanding into new markets and growing your distribution

The Ready-to-Drink Cocktail Market

The ready-to-drink (RTD) cocktail market has exploded in recent years, especially among younger consumers and those with an interest in craft cocktails. RTD cocktails offer convenience and quality, appealing to those seeking an upscale drinking experience at home. The target audience for canned cocktails tends to be 21-45 years old, relatively affluent, and interested in trying new and unique flavor profiles.

Developing Your Canned Cocktail Product

The key to launching a successful canned cocktail brand is creating a product that stands out from the competition. Focus on crafting unique, complex flavors that capture the essence of a well-made cocktail. Use high quality, all-natural ingredients and balanced recipes that translate well to a ready-to-drink format.

Your canned cocktails should be shelf-stable for 6-12 months and meant for at-home consumption or on-the-go enjoyment. Consider packaging your drinks in both single-serve and multi-pack options to appeal to different types of customers.

To develop your signature cocktail recipes, start by choosing 2-3 classic or innovative cocktails to feature in your initial product line. Work with a food scientist or co-packer to adapt the recipes for canning and ensure proper pH balance and food safety standards. Conduct taste tests with friends and family to get feedback and make improvements to the flavors before launching your products.

With a combination of high quality ingredients, innovative recipes, eye-catching branding, and smart marketing, you can build a canned cocktail brand that stands out on liquor store shelves and in consumers' minds. The key is taking the time to develop a truly unique product that people will come back to again and again.

The Economics of a Canned Cocktail Business

Launching a canned cocktail business requires significant upfront investment and ongoing costs. The largest expenses are:

•Ingredients: High quality spirits, mixers, and garnishes can cost $3-5 per can.

•Co-packing: Contracting with a co-packer to produce, can, and bottle your cocktails may cost $2-3 per unit.

•Packaging: Cans, bottles, labels, and packaging can cost $2-4 per unit.

•Licensing and compliance: Obtaining proper licensing and permits costs between $500 to $5,000 upfront and $200-$500 per year to maintain.

To determine a profitable price point, aim for a 3 to 4 times markup from your total cost of goods sold. For example, if your total cost per can is $8, a retail price of $24-$32 would be appropriate. You'll also need to factor in distribution fees which typically range from 25-35% of the retail price.

Pricing your cocktails at a premium level, around $2-3 per ounce, helps establish your brand as a premium product. Offering both single-serve and multi-pack options allows you to reach customers at different price points. You can also run promotions like offering a discount when customers buy more than one multi-pack.

Generating a profit will take time as you build your customer base and distribution. But with the right combination of product, pricing, and marketing, a canned cocktail business can become quite lucrative. The key is keeping costs under control, setting prices that balance profitability and consumer appeal, and scaling quickly to gain a competitive advantage.

Marketing Your Canned Cocktail Business

A strong marketing strategy is essential to building brand awareness and driving sales of your canned cocktails. Some of the most effective marketing tactics for an RTD cocktail brand include:

•Search engine optimization (SEO): Optimize your website and product pages to rank highly in search results for terms like "canned cocktails," "ready to drink cocktails," and "craft cocktails." This can drive organic traffic and increase visibility.

•Social media marketing: Build an active presence on Instagram, Facebook, and Pinterest to raise brand awareness, engage customers, and promote your products. Post high quality photos, share cocktail recipes, and run social media contests and giveaways.

•Influencer marketing: Send free samples to food and cocktail influencers, bloggers, and journalists to generate reviews and media coverage. Their endorsement and promotion to their followers can significantly boost your brand credibility and reach.

•Direct email marketing: Build an email list of customers and craft cocktail enthusiasts to promote new products, share recipes, announce events, and offer special deals and discounts. Email marketing has a high ROI and helps foster brand loyalty.

•Cross-promotions: Partner with complementary brands like craft spirit distilleries, cocktail bitters and syrups, or glassware companies to cross-promote to each other's audiences. This can expand your customer base at little to no cost.

•Events marketing: Sponsor local craft cocktail events, food and wine festivals, and spirits tastings to directly engage with target customers. Offer free samples of your products and run promotions to drive sales at the event and beyond.

•Traditional media: Pitch your product to media outlets like liquor industry publications, lifestyle magazines, and local news stations to earn valuable press coverage. Journalists and editors are always looking for innovative new products to feature.

With a combination of digital marketing, social media, influencer collaborations, media relations, and strategic partnerships, you can build awareness of your canned cocktail brand, reach new audiences, and drive more sales through retail and online channels. Consistency and quality are key to running an effective marketing campaign that showcases your unique brand and products.

Sales Strategies for a Canned Cocktail Business

To build sales of your canned cocktails, focus on getting your products in front of as many potential customers as possible. Some of the most effective sales strategies include:

•Distributing to local liquor stores, bars, and restaurants: Build relationships with nearby retailers to get your canned cocktails on their shelves. Offer promotions and discounts to incentivize them to stock your products. Local sales are a great way to raise brand awareness in your community.

•Selling direct-to-consumer online: Enable customers to purchase your canned cocktails directly from your website. This allows you to sell at a higher profit margin and stay engaged with your customers. You can also offer subscriptions and loyalty programs through your online store.

•Expanding to larger retail chains: Once you've established your brand locally, pitch your product line to larger liquor store chains, gourmet supermarkets, and national retailers like Total Wine, BevMo, Kroger, and Publix. Getting placement in major retail outlets significantly expands your reach and distribution.

•Building partnerships with distributors: Work with alcohol distributors to get your canned cocktails into the hands of retailers across a larger region. Negotiate the best terms and margins as possible. Distributors have existing relationships with many stores and bars, making it easier to quickly scale distribution.

•Exhibiting at trade shows: Attend major liquor industry trade shows to showcase your product line to distributors, retailers, and journalists. Serving samples of your cocktails and running promotions at your booth helps raise brand visibility and leads to new sales opportunities.

•Expanding to new markets: Once you've established a strong foothold locally, explore expanding into new cities and states. This involves finding new distributors to work with, pitching to large retail chains in that market, and running marketing campaigns targeted to customers in that area. Expanding to new markets is key to significant growth.

With persistence and relationship-building, you can build a distribution network to get your canned cocktails in front of customers everywhere. But start locally, focus on high-quality retailers and distributors, and expand strategically to new markets over time as your brand and sales grow. The key is balancing steady growth with maintaining high product quality and customer service.

Operations and Execution

To successfully operate a canned cocktail business, you need to establish scalable processes and systems to produce, distribute, and sell your products. Some of the most important operational considerations include:

•Find an experienced co-packer to produce your cocktails according to your recipes and package them for distribution. Conduct quality control checks to ensure consistency and freshness.

•Build a distribution network by pitching to local and national distributors. Negotiate terms, margins, and minimums. Distributors will store, sell, and deliver your product to retailers.

•Establish a sales process to pitch your cocktails to liquor stores, bars, restaurants, and other retailers. Offer promotional discounts and samples to incentivize them to carry your products. Provide marketing materials like spec sheets, photos, and shelf talkers.

•Develop a forecasting and inventory management process to ensure you have enough stock to meet demand without excess waste. Work closely with your co-packer and distributors to monitor sales volumes and optimize production.

•Invest in a customer relationship management (CRM) system to store contact information and sales data for all your distributors, retailers, and customers. A CRM helps streamline communication and track the performance of your distribution and sales channels.

•Build a team to handle daily operations including production scheduling, quality control, sales, marketing, accounting, and logistics. As your business grows, delegate responsibilities to maintain high quality and efficiency.

•Continuously improve your products based on customer feedback. Run promotions and surveys to get reviews and test new recipes. Innovation and adapting to trends will keep your brand relevant.

•Stay up-to-date with laws and regulations in the alcohol industry. Maintain all proper licensing and permits to legally produce and sell your cocktails.

Legal Considerations

Launching any business in the alcohol industry requires thorough research into licensing, permits, and regulations. The legal requirements for a canned cocktail business depend on your location, but typically involve obtaining a liquor license to manufacture and sell alcoholic beverages, as well as permits related to food production and distribution. It's important to understand that alcohol laws can vary significantly between states and counties.

Consult with legal counsel to determine all licenses and permits needed to operate your business legally before launching your canned cocktail product. Failure to do so could result in penalties, forced closure of your business, or even legal prosecution. The alcohol industry is highly regulated, so doing your due diligence on the legal aspects of starting a canned cocktail company is absolutely critical.

Ready to Launch Your Canned Cocktail Business?

Starting a canned cocktail business requires passion, perseverance, and dedication. But with the right combination of innovative products, strong operations, and smart marketing, you can build a brand that disrupts the ready-to-drink cocktail market.

Develop unique cocktail recipes, find an experienced co-packer, and invest in eye-catching packaging to create a premium product. Build a distribution network by pitching to local retailers and distributors, then expand strategically into new markets. Use social media, influencer collaborations, and media coverage to raise brand awareness and drive sales. And establish scalable systems to keep up with growth while maintaining high quality.

While launching any new business is challenging, the canned cocktail industry offers huge potential for growth and the opportunity to shape an emerging market. With hard work and the tips in this guide, you can turn your dream of crafting cocktails for the masses into a thriving, profitable business. The key is starting locally, perfecting your recipes and branding, and having the vision to scale when the time is right.

Here's to building a successful canned cocktail brand and sharing your delicious craft cocktails with people everywhere! The opportunity is out there—are you ready to take it?