Image Credit: Photo by Kal Loftus on Unsplash
You would think that being a product manager for a hot new start-up beverage would be a great job, right? Somewhat surprisingly, you’d be wrong. It turns out that it’s fairly easy to come up with the idea for a new beverage – it it has health benefits then it is ever easier, but it is then hard to be a product manager that is able to figure out the product development definition that will get your new drink beverage to catch on. This market is littered with the remains of companies that showed up and then just faded away. What does a product manager have to do in order to make their new drink product a success?
Why It’s Hard To Market New Drink Products
The good news about coming up with a new drink product for product managers is that it is fairly easy to explain your product to people. In fact, investors really seem to like these types of products. They tend to invest a lot of money in new drink startups. Unfortunately, a great deal of that money just ends up going down the drain. In the past year, the amount of money that has been invested in new drink products has increased by 11% up to US$3B.
Each year 100s of new drink beverages are launched, but most of them fade away within a few years. Product managers are responsible for determining which trends in the beverage business are going to end up going mainstream. A great example of a company that figured this out is Bai. They created an antioxidant drink. Traditionally, as little as 3% of non-alcoholic beverages ever reach more than $10M in average revenue. Bai got lucky and in 2017 they were purchased by the Dr. Pepper Snapple Group for $1,7B. Now that’s something to add to your product manager resume.
The reason that it can be so difficult to create a new beverage has to do with a number of different factors. First off, it can end up taking multiple years to come up with a workable recipe. After that, it’s going to be the product manager’s responsibility to locate suppliers and manufactures who will be willing to create the new drink at scale. These drinks don’t get made without money, and so a marketing pitch is going to have to be created that will allow investors to get motivated to lend the company funding. Customers will then have to become attracted to the product and product managers are going to have to be careful that they are able to appease regulators with whatever health claims that they are making.
The Secret To The Success Of A New Drink Product
The trick to creating a successful beverage is finding the correct mix of taste, funding, health claims, and, of course, just a little bit of luck. The goal of any product manager has to be to catch the eye of a big retailer. Product managers do have to be careful because consumer’s tastes can change very quickly. When that happen, a product that had been experiencing increasing sales may start to see declining sales.
Many product managers in the beverage space believe that what can separate the winners from the losers can be stated simply: funding. Product managers need to realize that the beverage industry is a cash-intense industry. Product managers need to understand that if they do get lucky and their product starts to take off, competition will increase very quickly. In order for a beverage to be a success, their product manager needs to be able to clearly communicate their healthfulness claims about how the beverage helps drinkers to lose weight, remember things better, and helps with digestion.
Product managers need to remember that they need to stop short of making health claims that can’t be backed up by accepted health studies. This is important if a product manager wants to make sure that his or her product is going to avoid being looked at by health regulators. The U.S. Food and Drug Administration will send warning letters to firms who so much as “like” social media posts that are talking about unsubstantiated health claims for a beverage. The rule is that any health claim made by a beverage must have rigorous scientific evidence to back it up. The key to the success of any product is “how does it taste” and, of course, from a consumer’s point-of-view “what’s in it for me?”
What All Of This Means For You
Creating and successfully marketing a new beverage is a challenging thing to do. This market is filled with companies that showed up, marketed their products for a while, and then faded away. Every year 100s of new firms try to launch a new beverage and most of them end up failing. Product managers who find themselves with this challenge need to take a look at their product manager job description and find ways to make their new beverage successful.
Perhaps its because it is very easy to explain what a new beverage is and what it’s purported health benefits are, but investors really seem to like them and are willing to invest money into them. The competition among new beverages is great with 100’s of them being introduced each year. A great example of a successful new beverage is Bai which eventually got purchased by Dr. Pepper Snapple. The reason that it can be so difficult to create a successful new beverage is that it takes a long time to get the recipe right and what it takes to get the new beverage manufactured. Additionally, even as the product manager is getting ready to introduce a new beverage, consumer’s tastes may be changing. To launch a successful beverage take a great deal of cash. Even if you are successful, your success will automatically attract a great deal of competition. Although health benefits may be part of what attracts people to your beverage, product managers have to be careful what they say or risk getting the attention of government regulators.
Simply creating a great tasting new beverage is only the start of creating a successful new product. Product managers need to understand the hurdles that they face in getting from idea to marketable product. Funding is one of the key ways that this type of product can become a success and product managers will only be able to obtain that if they can show that their new beverage product will be successful. If you find yourself in charge of a new beverage product, make sure that you go looking for the funding that you’ll need and keep your lips shut when it comes to talking about your product’s health benefits!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: How do you think that a product manager can communicate the health benefits of a new beverage without talking about them?
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