Jan 06 2023
As entrepreneurs, business owners & operators, we pour so much of ourselves into our business, even against the advice of close advisors, family, or friends. They tell us things like “take a break” or “you need to have a life outside of work” or “you’re going to burn yourself out”. Their well-intentioned messages of self-preservation and balance often fall on deaf ears. We obsessively pour over every detail of the business from production, label design, packaging, marketing, distribution, sales, warehousing and the customer journey. But despite all of the work and pain involved, there is something truly special about going into a store and seeing a product on the shelf that you had a hand in making. The feeling is one of both pride and gratitude. That is part of the reason why I fell in love with the beverage space to begin with and why I continue to obsess over the details today.
The RTD coffee space (and the beverage industry as a whole) has undergone significant changes in recent years, with an increasing focus on health and sustainability. Consumers are increasingly looking for RTD coffee options that are made with high quality, specialty grade beans and that are free from artificial ingredients. The market is also becoming more competitive with a proliferation of new brands and an increase in innovative product offerings. As more and more brands enter the marketplace, it becomes more difficult for brands to differentiate and establish themselves. There has also been a shift in consumer behavior when it comes to retail. Increasingly, consumers are looking for options that are more convenient and offer a wider range of products. As a result, there has been a proliferation of grocery delivery services and online retailers that allow customers to shop from the comfort of their own homes. This shift is towards a more personalized and convenient shopping experience with a focus on quality and ethically sourced products. .
The beverage industry is one of the largest and most competitive industries in the world. Small brands compete against some of the largest and most well-funded conglomerates on the planet. Additionally, we live in wildly uncertain times: global strife, uncertainty in the economy, fragile supply chains and the increasing polarization in culture seem to creep into every aspect of our lives and businesses. This can be a source of great anxiety but also a source of great opportunity for those who are willing to adapt. Social media and DTC ecosystems are the great equalizer for small brands. We can capture market share from legacy brands because we can connect with consumers in a real and authentic way that they cannot. I believe the brands that will win in 2023 and beyond will bring more aspects of their production in house and focus on building direct to consumer sales channels. Building strong direct to consumer sales channels helps brands to be less reliant on traditional retailers and decreases customer concentration. But these sales channels do not come without challenges of their own. Already elevated shipping costs can be exacerbated by heavy beverages or food products, regulatory restrictions can prohibit you from shipping certain SKU’s without temperature controls or worse, your product could sustain substantial damage during transit and sour the customer experience.
I think in 2023 and beyond we will see a push towards products made by people and companies who are deeply passionate about the process and who can communicate that effectively to the consumer. Brands that can meet the customer where they are without sacrificing quality or the customer experience will win big. I believe brands who do not make this shift and continue forward without focusing on building new sales models will get left behind. We must continue to evolve to meet the changing needs and preferences of the market. I believe we will see massive changes this year in the beverage space and beyond. Brands that will win big will work to build their own sales channels, distribution networks and supply chains, making them less reliant on traditional retailers and the status quo. It is frightening, exciting, and humbling all at the same time. It is truly time to evolve or die.
If you made it this far, thank you for reading and I hope you will follow us on our journey as we continue to navigate this space. Thank you for your support and best wishes in 2023.
Brian Travis - MADE Coffee