The beverage industry has evolved over the past decade, and opportunities for small and medium beverage brands have increased. Economic pressures have seen consumers opt for quality over quantity, leading to an increasing preference for alternative over mainstream beer brands. Meanwhile, a health-conscious market trend has opened opportunities for new brands offering healthy alternatives, fermented drinks and non-alcoholic beers.
Securing manufacturing and distribution agreements with quality providers is pivotal to a beverage company’s progress and success amidst this growing and competitive landscape. Below, we explore the strategies surrounding these commercial agreements for beverage companies and how they can be used to drive success.
Securing the Perfect Partnerships
Manufacturing and distribution agreements are more than just contracts; they are the cornerstones of your beverage business’s supply chain. Choosing the right partners and documenting your arrangements can streamline production, ensure quality, and extend your reach in the market.
If you’re an ambitiously growing beverage business, be sure to assess your manufacturing and distribution partners’ capacity to meet your current demands and their scalability to accommodate future growth. A strategic partnership should be flexible enough to adapt to your evolving needs, saving the hassle and pressure of changing suppliers during periods of increased demand.
Manufacturing
Consumers are demanding excellence and opting for quality over quantity. Therefore, when entering into manufacturing agreements, beverage businesses should also focus on stringent quality standards and ensure warranties are in place for defective items. You want your manufacturer to adhere to the highest production quality and safety protocols to maintain the integrity of your beverage brand.
To this point, while cost efficiency is an essential aspect of any business, it should never compromise the quality of your beverage.
Distribution
Distribution agreements are your passport to reaching your target audience. Seek distribution partners who understand the beverage industry and your specific niche. Their knowledge can help navigate market trends, consumer preferences, and potential challenges more effectively.
Efficient logistics and timely deliveries are key to keeping your product fresh and readily available, so ensure your distribution partners have the infrastructure and systems in place to meet your delivery timelines consistently, clarify your expectations and put them in writing.
How to Protect Your Business
Before signing any agreements with manufacturing or distribution partners, consult legal experts who specialise in the beverage, hospitality or FMCG industries. They can ensure that contracts are clear, comprehensive, and tailored to protect your brand’s interests. Many businesses get caught out signing generic agreements that favour the supplier or do not suit their specific needs.
Considerations in your agreements should include:
- Safeguarding your intellectual property, including trade marks, recipes, and branding. Clear agreements should outline who owns what and how they can be used.
- Warranties or consumer guarantees, including allocating responsibility for replacements or refunds in the event of a consumer claim.
- Provisions for dispute resolution. Having a clear process for addressing conflicts can save both parties time and resources in the long run.
Manufacturing and distribution agreements are pivotal to your beverage company’s success, and should be carefully drafted to protect your brand’s interests. Contact our commercial law experts to discuss your beverage business’s needs and legal agreements.
