In striving to maintain full control over all processes and keep hold of assets, alcohol brand owners, and especially those who plan to become alcohol brands, begin to consider establishing their own production. As far as it is strategically justified, could there be a modern alternative – contract bottling?
Establishing your own brand and establishing your own production are two very different concepts. In terms of the first idea, the priority issues are the perception of the brand on the market, development and the step-by-step implementation of the development strategy, the establishing of distribution channels and the ensuring of the presence of goods in retail outlets.
The second issue regards focussing on material and economic issues. It takes years to establish competitive production - finding solutions to numerous problems linked with management of a new type of activity which involves a huge quantity of nuances: equipment, staff, logistics, control, purchase of raw materials and technological processes.
Having established production, it is going to be necessary to ensure its profitability, or in other words, its uninterrupted operation, which could turn out to be inappropriate in the current economic conditions. Production ties down its owner, becoming less flexible and much more busy. The owner of the brand becomes a business executive who is already thinking about pouring the brands of others on one’s own equipment, and in the process, forgetting the purpose of production.
In a world of modern mobile solutions, where business is led from any part of the world, and transactions are completed at one click of a smartphone, where trends are changing so quickly that it is impossible to alter assets to suit, the winner is the one who is more flexible in choosing a solution to a problem. The modern owner of the alcohol brand, striving to overtake competitors, uses any means necessary; assets, resources acquired from outsourcing. The owner activates and deactivates these as needed, avoiding risks and making profit.
Profit from contract bottling is more than one can imagine. The system of outsourcing, according to R&D Magazine, reduces overheads by 30-35%. At the same time, contract bottling offers links to the expensive technologies of others and to experience which remains with the brand owner after the contract has come to a close. The time and resources saved are directed to helping to effectively manage the output of the brand on the market. This modern style of business, which of course doesn’t suit everyone, deserves some consideration before making a final decision.
