In this article, you’ll learn:
- What private label beverage companies do and how the process works
- The benefits of working with private label companies
- The questions you need to ask your private label partner – and the information they need from you
For FMCG businesses specialising in ready-to-drink (RTD) products, working with private label beverage companies is an incredibly valuable strategy. However, if you’ve spent years developing and launching drinks in-house, working with third parties can be difficult to navigate.
That said, the benefits of working with private label beverage companies far outweigh the initial steps you need to take. Not only can it streamline your time to market, but it can also significantly open up your product range to make you more agile in the face of new trends.
To learn more about private label beverage companies and the process behind them, I spoke to Santhanu Nambhamkannath. He is the Innovation & NPD Lead at Veetee Group, a global food manufacturer. Read on for his insight.
What do private label beverage companies do?
As Santhanu explains, private label companies help businesses like drinks manufacturers launch products.
“Private label companies primarily produce products that are sold under supermarket or retailer labels,” he says. “A meticulous product development process is followed, from identifying a gap in the market to offering an alternative to a branded product.”
In the FMCG sector, particularly with RTD drinks, private labelling is used by established brands to launch a new product without requiring in-house resources. Instead, they can rely on their manufacturer’s infrastructure – from product formulation experience to canning facilities – to expedite the process. At Hardtank, we support this process end-to-end, helping brands bring ready-to-drink beverages to market with faster turnaround, expert guidance, and flexible formats.
Businesses can either select from their manufacturer’s existing formulations or develop a custom formula. While this may take longer, it also means you can retain ownership over the formula to use again in the future. This gives your brand a unique product that helps you stand out from the competition.
“Private label success really hinges on the ability to balance innovation and quality with cost efficiency,” he tells me. “These products have evolved significantly – they’re no longer just ‘cheaper alternatives.’ Many private label beverages now compete head-to-head with national brands in both quality and creativity.”
Why is it beneficial to work with private label beverage companies?
The benefits of working with private label beverage companies include the speed of going to market, the lower setup costs, and the variety of products you can launch.
“One of the biggest benefits is the opportunity to innovate quickly,” Santhanu says. “Because private label brands often have more direct access, you can move from concept to shelf faster than traditional national brands.”
For example, Hardtank’s private label services have a lead time of four to six weeks after deposit payment and design approval, making you much more agile in launching a new product.
It means you can chase the biggest FMCG trends – such as matcha, functional drinks, and cold brew coffee – much faster than doing so in-house. “There’s a huge variety,” Santhanu says. “One day we might be working on a zero-sugar iced tea with botanicals, and the next on a high-protein oat shake.”
This freedom allows drinks businesses to refine their product range without wasting time or money on extensive in-house production. “We’re often working directly with retail buyers or brand managers, which gives us clearer insight into what consumers actually want. Whether that’s a new functional ingredient, a sustainability claim, or a trending flavour, the connection helps us build smarter, more relevant products.”
Since private label beverage companies have experience with a wide range of products – from regular cold brew to vegan lattes or even energy drinks – you can work with them to easily launch new products.
Importantly, private label beverage companies provide businesses with a cost-effective, low-risk route to market. Since you don’t need to invest in specialist equipment or canning facilities, you can significantly reduce your startup costs.
“From a business standpoint, private labels can be a growth engine,” Santhanu adds. “It allows retailers to offer competitive pricing while still delivering quality, which builds customer loyalty.”
What do you need from your private label beverage provider?
Understanding how to start with your first private label beverage project is another key consideration. It begins with an initial consultation with the manufacturer’s development team, where you’ll determine the drinks you want to produce.
“To create a successful private label product, clear communication from the start is essential,” Santhanu says. “As a development team, we rely on the brand or retail partner to give us a well-defined brief. The more precise the brief, the more efficiently we can develop a product that aligns with their goals.”
So, what information should you provide? Be sure to mention any target flavours, your ideal consumer, price point, cost of goods target (COGS), packaging format, and project timeline. Ensuring you and your partner are aligned on these targets ensures that the project stays on track and minimises last-minute changes.
Of course, there will be some information you need from them as well. Be sure to clarify the minimum order quantity (MOQ) for each order, so you can purchase the right amount of product without exceeding your budget. Also, determine the lead time, the shelf life of the products, and whether the supplier will handle transportation from their facility.
Ultimately, it boils down to clear communication from both sides. “When starting a new project with a private label partner, asking the right questions early on is essential,” Santhanu concludes. “It helps us align on goals, avoid costly revisions, and develop a product that truly fits the brand and consumer expectations.”
Once you’ve cleared up these questions with your private label beverage provider and understand the process, you can get to work on producing a new RTD drink.
Private label beverage companies: Key takeaways for FMCG businesses
- Working with private label beverage companies helps businesses cut their launch timelines and reduce setup costs.
- The agility also allows you to quickly produce new products like matcha or functional drinks.
- You need to communicate with your private label partner, providing details like flavours, target demographics, and timelines.
Ready to learn more about our private label beverage services? Visit our website to learn more or schedule a free consultation.
Private label beverage companies FAQ
What are private label beverage companies?
They are third-party manufacturers that develop and produce drinks for a brand’s own label, handling everything from formulation to packaging.
Why should I consider private label over in-house production?
Working with private label companies reduces your upfront costs and makes it easier to launch new products, since you can use their facilities and infrastructure.
What information do you need from private label beverage companies?
You should determine their minimum order quantity (MOQ), lead time, product shelf life, and whether you need to organise handling and transportation.
Want to learn more about our private label beverage services?
- Discover more: Read about Hardtank’s RTD services here.
- Hear from experts: Watch our webinar on developing custom RTD beverages.
- Book time with the team: Schedule a free appointment here.
