What you’ll learn in this article:
- What steps are involved in RTD drink product development, from concept to launch
- The key differences between private label and custom formulation for RTD drink product development
- How to decide whether private label or custom formulation is right for your business
- Why working with an RTD manufacturer can save time and resources
- The importance of formulation ownership and how to protect your rights
- Practical tips for preparing your brand for RTD product commercialisation
- Quick answers to common questions about RTD drinks, private label, and formulation
For FMCG businesses, bringing a new drink product to market is a rewarding but complex journey. Especially in the fast-growing ready-to-drink (RTD) sector, the process requires more than just a good idea. You also need an understanding of the logistics, consumer trends, and manufacturing process behind drink product development to stand out and get your product to market.
To streamline the process, businesses may partner with private label manufacturers for their RTD drink product development. It significantly streamlines the production process and saves money, meaning you can preserve margins and attract sales in this evolving sector.
To learn more, I spoke to Kathryn Read, owner of Kathryn Read Consulting. She specialises in beverage product development across global markets. Read on for her insights into RTD drink product development.
Where to start with RTD drink product development
Before considering any other element of your drink product development, Kathryn recommends clarifying your business objectives and market positioning.
“It’s going to depend on whether you have existing business or if this is your first planned SKU,” she says. Therefore, newcomers to the RTD sector will require more preparation to determine brand identity and target audiences before developing the brand.
Next, you need to assess market demand. You should ask a number of questions, considering the niche to target or whether you are enhancing an existing product category. By knowing which area of the market you’re focused on, you can use this to guide your drink product development and production.
Globally, the RTD market is valued at USD $766 billion, demonstrating the potential within the sector for FMCG businesses. It is growing year-on-year in key regions such as the United States, Canada (both 2%), and Germany (4%) – in no small part due to consumer trends towards convenience.
Younger demographics are at the centre of this growth, preferring drinks they can easily consume on the go. RTD cans, usually made from aluminium, are especially popular for these products. Since it is an infinitely recyclable material, it also aligns with consumer trends towards sustainability. Up to 81% of consumers are willing to pay more for products in sustainable packaging, so the RTD market presents ample opportunity.
Should you use an RTD manufacturer for drink product development?
Once you’ve conducted market research and decided on a concept, you must consider the logistics of drink product development. There are several key factors here: RTD products must be shelf-stable, reproducible at scale, and compliant with food and beverage safety regulations.
There are a lot of decisions to make early on, and one of the biggest is whether to produce your RTD product yourself or work with a manufacturer. For many businesses – especially those launching an RTD drink for the first time – working with an experienced manufacturer is a smart move.
“A manufacturing partner can guide you through what is and isn’t possible on their equipment,” Kathryn notes. “They can help you avoid pitfalls around what is technically possible or realistic shelf lives.” In other words, they know what will work and what won’t – knowledge that can save you money and time.
Outsourcing production to RTD manufacturers such as Hardtank has other benefits, too. For example, it means you can rely on their existing equipment and manufacturing process, rather than investing significant resources into setting this up yourself.
Drink formulation and canning systems have a significant upfront cost, alongside concerns around space, maintenance, hygiene, and staffing. By working with a third party, you can lean on an existing system that is already optimised for large-scale production.
This expertise also factors into the logistics of drink product development. For example, Hardtank offers up to three rounds of feedback for custom formula RTD drinks, so you can adjust ingredients or flavour notes to your liking. It ensures the final product is exactly to your specifications, meaning your branding and promotional strategy can accurately reflect the drink’s flavour and ingredients.
One significant element to consider is the ownership of your custom formulation, which is something Kathryn advocates for. “Get a watertight agreement about who owns the rights to it,” she warns. Manufacturers such as Hardtank give full ownership of custom formulations to clients, meaning you don’t need to worry about it being replicated elsewhere in the future.
Determining whether to use an RTD manufacturer for drink product development is just as important as deciding to enter the sector. Without the proper knowledge of what you need from a manufacturer, it will be more difficult to formulate and launch your new drink.
The commercialisation stage of RTD drink product development
As Kathryn advises, RTD drink product development doesn’t end once you’ve formulated your flavours and products. “I always tell brands that new product development is just step one,” she says. “You also need a strong plan in place for actually building the brand.”
To start, you’ll need to have a narrative and identity in mind for your products. Only then can you set up production runs and start packaging, labelling, and shipping the drink. Kathryn recommends asking yourself these questions during commercialisation:
- Do you have a compelling brand story and narrative?
- Have you tested prototypes with real consumers?
- Is the price point competitive and profitable?
This stage can present other bottlenecks for FMCG brands. Particularly if you handle production in-house without a manufacturer, you’ll need to invest time and money into these post-production factors. By partnering with a manufacturer, you can harness their existing knowledge and resources to determine price, consumer reach, and branding pillars.
For example, Hardtank’s RTD process includes canning, packaging, and shipping to your warehouse. Using this method, you can communicate throughout to establish branding and launch considerations – meaning you can get the product to market much faster.
Doing so also speeds up the post-production process, which can be delayed by anything from poor consumer testing to mismatched branding. “It can be long and expensive,” Kathryn says. If you’re constantly checking in with your manufacturer to iron out these issues, however, it becomes much more efficient.
In conclusion, RTD drink product development is a long process that requires a considerable amount of thought, research, and investment. Partnering with a manufacturer, however, can significantly speed up your formulation, development, and product launch.
Want to bring your RTD drinks to market? Whether you’re looking for custom formulations or private label solutions, Hardtank can help you launch faster and more efficiently. Get in touch today.
FAQ
What’s the difference between private label and custom formulation in RTD drinks?
Private label refers to using a manufacturer’s pre-existing formulations where you simply apply your brand’s label and packaging. Custom formulation involves creating a unique recipe for your product, often with multiple sampling rounds and feedback. Manufacturers like Hardtank offer both pathways, so you can choose based on your brand goals, timeline, and budget.
How does RTD drink product development work?
Start by defining your target market and product concept. Then, decide whether you want to use a custom formulation (develop your own recipe) or a private label solution (use a ready-made formula). From there, determine flavour profiles, branding, design, and logistics with your chosen manufacturer.
What are the benefits of working with an RTD drink manufacturer?
Working with an experienced manufacturer can simplify production, reduce costs, and speed up time-to-market. For custom formulation, you gain expert guidance, access to production facilities, and the ability to scale quickly. Private label solutions are faster and require less investment, but offer limited customisation.
Do I still own my drink formulation if I work with an RTD manufacturer?
If you choose custom formulation, manufacturers like Hardtank provide full ownership rights to your unique recipe, so it can’t be used elsewhere. However, private label formulations remain the manufacturer’s intellectual property, and you only apply your branding to a pre-made formula.
How long does it take to launch an RTD product?
For private label drinks, the timeline is typically shorter, often a few weeks. Custom formulation can take longer due to rounds of sampling, adjustments, and final approvals, but it offers a unique product that aligns with your brand identity.
How can I ensure my RTD drink meets safety and regulatory standards?
Reputable manufacturers like Hardtank handle compliance with food and beverage regulations, shelf stability testing, and packaging safety. This ensures your product is safe, consistent, and market-ready.
Which option is right for my business, custom formulation or private label?
It depends on your goals. Choose private label if you need a quick, cost-effective way to add RTD drinks to your line with minimal customisation. Choose custom formulation if you want to create a signature product that reflects your unique brand and flavour preferences.
