The beverage industry is experiencing a major shift. Gen Z is moving away from traditional spirits, consuming one-third less beer and wine than previous generations. Instead, they’re gravitating toward health-conscious alternatives that align with their wellness-focused lifestyles. This creates a massive opportunity for entrepreneurs with innovative beverage ideas.
The beverage industry continues to seek out new opportunities for growth, so there’s never been a better time to release a creative, tasty new beverage vision into the marketplace. Here’s how to turn your beverage vision into a reality.
Types of beverage businesses
In addition to wine, beer, and alcoholic spirits, popular beverage categories include coffee, tea, juices, sodas, seltzers, alcohol alternatives, nootropic drinks, health drinks, and more. Here’s a guide to some of the most popular non-alcoholic beverage business categories, featuring insights from successful entrepreneurs who’ve appeared on the Shopify Masters podcast.
Coffee
Coffee businesses come in many forms—from independent roasters to dropshippers, physical cafés, and bottled beverages like cold brews, lattes, and concentrates. The key is identifying one or more elements that differentiate your business from competitors.
Claudia Snoh and her mother, Mariella Cho, decided to focus on quality and simplicity when co-founding Kloo, which sells a proprietary coffee concentrate in refillable glass bottles. “We are on a mission to decode the complexity of craft coffee, and we do this by offering the highest quality coffee, in the easiest format,” Claudia says. “The hero product that we launched with is called craft coffee concentrate, which is a single-origin super concentrate that is 12 times more concentrated than your typical coffee. So instead of filling your cup entirely with hot or iced coffee, you add a small shot of the concentrate and fill the rest of the cup with hot or iced water.”
Functional beverages
Functional health drinks have grown in popularity, with the category growing by 54% since 2020. These include mushroom coffee, vitamin shots, and elixirs that leverage spices like ginger or turmeric. Scientific studies suggest certain adaptogenic or superfood ingredients may deliver health advantages, such as stress relief or improved cognitive function. Consumers are willing to pay premium prices for these benefits, especially when companies make their products convenient to use.
Clevr Blends and Blume are two such brands that have made it possible for customers to enjoy a functional beverage on demand, selling powdered superfood latte mixes you can mix directly with water for a café-style beverage at home. “The mission of the company is to incorporate these really nutrient-dense, healthy ingredients into recipes and coffee shop staples you already love, so that more people can enjoy them and get a nutrient boost in their everyday ritual,” says Blume founder Karen Danudjaja.
>Kombucha
Kombucha is a fermented tea created using a starter known as a SCOBY (symbiotic culture of bacteria and yeast). This probiotic beverage has a fizzy, tangy taste, pairs well with various flavors, and reportedly supports both gut and immune health. The kombucha market offers plenty of room for innovation, with products varying greatly due to different brewing techniques and flavor combinations.
Trey and Ashleigh Lockerbie spent years perfecting their homespun recipes and gathering feedback at local farmers markets before hard-launching their kombucha brand Better Booch. “I want to encourage every entrepreneur to set up at farmers markets, because that was our initial source of income for the first few months,” Trey says. “You get this immediate customer reaction, no matter what it is, good or bad.”
Soda
The soda aisle is transforming, with new offerings that incorporate prebiotics and probiotics alongside natural ingredients—all without the sky-high sugar levels of traditional sodas. “A lot of brands have come into the market selling better-for-you sodas,” says Alex Matthews, a co-founder of the modern Mexican soda company De La Calle. “I think that’s a good thing for everybody.” The market for these drinks is huge: In 2024, the retail sales value of better-for-you soft drinks from the US reached $57 billion.
Alex and co-founder Rafael Martin del Campo based their beverages on a recipe Rafael’s grandmother had for traditional tepache, a typical offering of Mexican street vendors. Tepache, Alex explains, “is relatively simple to make. You ferment pineapple rind in a wooden barrel called a tepachera, and add water, spices, and regional fruits that are found regionally, whether that’s oranges or limes or pineapple or ginger or tamarind.” Building your product from a personal connection can help you stand out in a crowded market and engage more authentically with your target audience.
Non-alcoholic alternatives
Global market researcher IWSR predicts the beverage industry category of ready-to-drink refreshments will be worth $4 billion by 2027. These include booze-free beers, wines, and other spirits, each with its own creative spin. One example is the tonic seltzers from Hiyo, which incorporate adaptogens and nootropics like L-theanine and lion’s mane mushroom extracts to foster an overall sense of well-being that the brand calls the “float.”
Non-alcoholic aperitifs represent another growing segment, with brands like Ghia leading the charge. Like many first-time entrepreneurs, founder Melanie Masarin created a product inspired by her own experience. “I wanted to make a drink that I felt comfortable drinking every night,” she says. “Something that I felt was good for me, was hitting all of the flavors that I was craving in a more complex alcoholic drink, and would make me feel socially included without the guilt.”
The wave of consumers reaching for non-alcoholic beverages has led to new retail formats, too, like Spirited Away, a non-alcoholic bottle shop. Founder Douglas Watters craved a place where he could buy non-alcoholic wines, beers, and spirits in person. “I wanted that experience of going to a neighborhood bottle shop and browsing a curated selection,” he says.
Sparkling water
The rise in non-alcoholic alternatives has fueled increased demand for sparkling water. The sparkling water market reached $42.6 billion in 2024, and experts expect it to grow at a compound annual growth rate (CAGR) of 12.4% through 2032. While mainstream brands like LaCroix, Waterloo, and Spindrift dominate most retail aisles, smaller businesses have carved out successful niches.
One such success story is City Seltzer, the idea for which emerged from a beer company, Dominion City Brewing. “We started in a backyard, making beer,” says founder Josh McJannett. “It was a passion, and we were content to make a product we were proud of.” However, when preparing to participate in an upcoming beer festival, Josh and his Dominion City Brewing team decided they needed some way to offset hours of unlimited beer tasting for the event’s guests. “Obviously, the risk of overconsumption was on our minds, and we wanted to encourage people to make responsible choices,” Josh says. They concocted an orange cream water that evoked a fizzy Creamsicle and made it available around the festival. “Afterward, the feedback was all about, ‘Where can I get more of this water?’” he explains. “That gave us [the] idea that maybe there was more to this than just tempering people’s beer consumption.”
How to start a beverage company
- Establish a road map
- Secure funding
- Develop a recipe
- Find manufacturers and suppliers
- Comply with FDA regulations
- Perform pilot testing
- Seek distribution
- Create branding and marketing
- Leverage lifestyle content
Have an initial drink idea the world needs to try? Here’s your step-by-step roadmap to becoming a successful beverage entrepreneur.
1. Establish a road map
Every successful beverage company begins with a solid plan. Start by documenting as many details as possible about your concept, then use this foundation to develop a broader strategy. First, define your specific beverage industry category to identify brands you’ll compete with for market share. Narrow your focus from broad categories (“non-alcoholic beverages”) to specific niches (“non-alcoholic canned spritzes”) to help determine your beverage’s unique selling point.
Next, conduct thorough market research. Study the category’s financial trends and opportunities as well as interest from your target market. Your market research should also include SWOT analysis to better define your strengths, weaknesses, opportunities, and technology.
Finally, write your beverage startup business plan. Include your short-term and long-term goals, an executive summary, sample recipes, financial projections, operational details, relevant market research and analysis, and insight into your beverage and brand marketing strategies. The details of your business plan will likely evolve as you make progress, but you’ll need a rough plan to start seeking funding.
2. Seek funding
Starting your own beverage company typically requires significant upfront capital for formulation, the manufacturing process, and packaging. Depending on your idea’s appeal, you may attract interested investors before you even have a product to share. You can also apply for small business grants or seek support from friends, family, and other contacts.
As with any entrepreneurial endeavor, networking is key to surfacing the right partners, whether you’re looking for someone to be an active part of brand development or help you cover costs. Keep an eye on platforms like AngelList, StartEngine, and AngelMatch for angel investors with beverage industry expertise and stay plugged into the beverage industry through conferences and beverage-centric expos. Try to schedule calls or meetings with individuals whose experiences you can learn from, regardless of whether or not they are interested in investing right now. You never know—they might be willing to help you down the road.
3. Develop a recipe
Recipe development is the most critical step in launching your beverage company. Your drink must taste appealing to diverse palates and be replicable at scale. Whether you’ve been experimenting at home or you’re starting from scratch, now’s the time to enlist the help of a beverage manufacturer.
Before founding Ghia, Melanie kept running into the same problem in New York City: a lack of non-alcoholic options on par with a serious culinary experience. The choices often came down to sparkling water, Mexican Coke, and sugary mocktails. “I wanted something more layered, a sort of New Age bitter or Italian amaro that traveled through the palate more,” Melanie explains. Eventually, she found her way to a recipe formulator. “This is where the fun part of the job begins, even though you taste a lot of bad formulas until you find the one,” she says. “But making it in the lab is actually the easy part. After that is the commercialization aspect of the drink, scaling your recipe from small batch to something that you can actually produce at scale.”
Depending on the complexity of your beverage, you may choose to work with a commercial beverage formulator who can help with in-house experimentation. Alternatively, you could combine approaches by partnering with an independent food scientist or recipe developer through a site like Upwork or an incubator like the Rutgers Food Innovation Center.
4. Find manufacturers and suppliers
Many freelance scientists or recipe developers can also use their experience to help you navigate and vet suppliers, co-packers, and manufacturing partnerships. When looking for a supplier or beverage manufacturer, ensure you understand their minimum order requirements (MOQs) and sourcing supply chain. Large manufacturing companies often have partnerships with certain ingredient suppliers, so if there’s a specific ingredient or producer you’re hoping to work with, confirm that the company can make that connection.
5. Comply with FDA regulations
Whether you’re manufacturing beverages yourself or working with a third-party facility, it’s important to understand Food and Drug Administration (FDA) compliance regulations. Manufacturing facilities must register with the Food and Drug Administration (FDA) to remain compliant with food safety regulations, even though food and beverage products don’t require FDA approval for sale. This changes if you make a specific claim around the health benefits of your beverage, which may require additional approval.
While it’s up to the manufacturing facility, not the beverage brand, to maintain compliance, if you’re outsourcing production, make sure any facility you work with is registered and follows food safety regulations.
6. Perform pilot testing
Once you have beverage samples and packaging, ask for notes from a group of friends or trusted peers, or submit small batches to strangers through crowdfunding sites or discovery sites like Thingtesting. “I roped in all my friends and had them give me flavor notes,” says Melanie of Ghia’s beginnings. “We asked so many chefs whose food we loved for their feedback. I think we poured a thousand Ghias before we actually finalized the formula and bottled it.”
Alternatively, you could soft launch before all the pieces are in place to gauge interest and do additional market research on the fly, like Kloo did. “We were surprised to learn that our subscribers didn’t necessarily want to get the nice glass bottles that we offer with every order,” Claudia explains. “A lot of them actually offered to ship those glass bottles back to us to recycle and reuse. We ended up introducing low-impact refill pouches that are recyclable — and much, much lighter, which really helped us on the margins.” This customer feedback allowed the brand to scale back its packaging and lower its prices.
However you choose to collect feedback, be prepared to really absorb and act on what you hear. Hiyo’s initial formula was a miss with investors, who said so. “The product needs to sell itself,” says co-founder Evan Quinn. “So we paused and reformulated the product. We went back to those same people who said no [and] batted a thousand. Everyone loved the new product, and they also loved that we were open to feedback and willing to actually act on it.”
7. Seek distribution
As a new beverage brand, you’ll need to choose your initial distribution strategy: direct-to-consumer (DTC) ecommerce or wholesale to retailers. Hiyo splits its sales evenly between DTC business and retail shelves. “Beverages aren’t traditionally sold online,” Evan says, “so I think you really have to have a different value prop for each channel. Your local supermarket is where you are discovering new brands and maybe testing them out because you can buy a single can, as opposed to 12. Whereas online, subscriptions are huge; people want the convenience of a 12-pack of Hiyo being dropped on their doorstep every 30 days.”
To pursue a retail strategy, you’ll need to make connections with local distributors and shop owners, cold call potential markets, and leverage any current relationships you have. The latter came in handy for City Seltzer. “When we started the beer business,” Josh says, “we had a very direct relationship with the bars and the restaurants that took our product. It was second nature to us to go to the bar manager or the restaurant owner and say, ‘Hey, try this, we think it’s got a place on your bar.’ That direct relationship carried us for the first 18 months of our business, by literally throwing a couple cases of City Seltzer on top of the keg we were dropping off to the local bar.”
8. Create branding and marketing
Your brand identity encompasses everything from your company name and primary company logo to your color scheme, packaging design, typography, tone, and social media presence. Ghia began with canned aperitifs but eventually expanded into bottled non-alcoholic spirits that could live side by side with their alcoholic counterparts on a bar. “We’re conditioned to think that if we’re not drinking, we’re having a lesser experience,” Melanie says. “Less belonging, less acceptance. We wanted a bottle that felt like a jewel, something that people would proudly display, to break that stigma.”
You can further develop your brand identity and expand upon your brand story on your website. Claudia discovered the importance of this later in the process than she would have liked. “Anyone who heard the brand story directly from me knew exactly what made us unique, but people who discovered us online mostly thought we were just another coffee concentrate brand with a cool bottle,” Claudia says. “They didn’t realize that we were a Q Grader–founded brand, and that my mom invented our proprietary brewing process.”
To rectify this, Kloo invested its beverage and brand marketing efforts in a brand video that highlighted Mariella’s story and centered Kloo’s website more around the craft aspects of the product.
9. Leverage lifestyle content
With countless beverage brands competing for attention, building a community around your product is essential. One of the best ways to do this is by positioning your beverage within a larger lifestyle context, such as sober-curious culture or coffee enthusiast communities. Strong connections with a niche community can inform your marketing and sales strategies.
Fans of Spirited Away, for example, can consult the store’s complementary site, Dry Atlas, a guide to everything going on in the world of non-alcoholic beverages. On his YouTube channel, James Hoffman, the founder of Square Mile Coffee Roasters, encourages his target audience members to sip their coffee while enjoying entertaining educational content, reviews, technique breakdowns, and philosophical musings. “It took me a while to work out who I really wanted to talk to,” he says. “That informed the kind of videos I made and how I formed a strategy. … Get into the habit of making and publishing and building a small audience and going through that process of developing what you want to do early.” Since starting the channel, he has gained more than two million subscribers.
How to start a beverage company FAQ
How much does it cost to start a beverage company?
The cost of starting a beverage company varies significantly depending on formulating costs (typically $15,000 to $20,000), ingredients, manufacturing, packaging, distribution, and marketing, although $100,000 is a general starting baseline.
How can I start my own beverage business?
To start a beverage business, you’ll need a unique and appealing idea and financiers willing to help you formulate and produce it at scale. You may choose to pitch your idea to investors or incubators, apply for a small business grant, or tap friends, family, or a crowdfunding campaign for help.
Is starting a beverage company profitable?
Yes, a beverage company can be profitable, depending on your target market, the scale of your operation, and whether you employ sales personnel. Bootstrapping production and distribution can help offset initial costs while you build brand recognition.
What beverage makes the most money?
Non-alcoholic alternatives are particularly popular and have seen explosive growth, with sales for some brands doubling within two years. Analysts expect healthy sodas, like Olipop and Poppi, to grow significantly in the coming years.
