Expert: Eric Hofer - 8/16/2009

Question
I have a good Idea for an organic beverage. I would like every aspect to be green but I do not know what to do first.
I have researched a few companies that claim they can do everything needed in order to get my
product on the shelf (pro-liquitech,manufacturingdrinks,com eagle beverage). I am a little nervous because I do not know if these companies are legitimate  or just internet rip-offs.  In addition, I do not know how the process works to recognize if I am being jerked around.

So, my questions are:
How can I tell the legitimate companies from the fake?
What is the process?
Are there any legitimate "green" companies that I can work with?

thank you for your time.

Answer
Catching out a fraudster is tough.  It's obviously their business to part you from your money and to do that, they've got to look legitimate.

I'd say that the basic process for finding a supplier are the same as what you'd use buying a house, negotiating a major capital investment, etc.  

Look for references; check on previous projects, ask to see the invoices; research the individuals on line; see if there are liens, attachments, judgements, etc against the principles.  Look at the number of years they've been in business.  With the references supplied, check on the quality of their products; request confirmation from the companies that they use to assay (the quality of) their beverages.  Also ask for references from their banks.  You can also research "ex-" employees to see if you can get any information that way.  And look for references from their key suppliers.

You can request some for of bonding; and you can research the suppliers' insurance coverage.  

There's a big difference though when compared to the internet.  On the "net" it's quite easy to work without getting to a physical product - pass a credit card, get billed but nothing happens.  However, in what you're planning on doing you'll likely visit a factory, see actual product running off the jobber's line, be able to sample, etc.  You just need to make the trip.  For a "con" this stuff is more difficult to pull off (vs. just having a website).  There's having the physical plant; using up capital to make a product run, etc.  And when you see the plant line turning out the product, you'll have a "bottle" with a label that you can then use to check the veracity.

- - -

My experience vis-a-vis being "green" is that it's a market ploy.  In truth, many of the green claims turn out to be deceptive (see www.which.co.uk), or at the very least bending of the truth.  

The costs of being more environmentally friendly are higher and that goes against the basic incentives that come with being in business - e.g. to turn a profit.  At the end of the day freezing or having some creature comforts tends to end up "burning fuel" that adds to CO2.  For you to live, you have to pollute; claiming anything to the contrary is fantasy.  You'll have to have bottles, trucks, consume electricity, warehouse, etc.  And then you'll sell product to people who you'll have to hope dispose of their waste responsibly.

So for your marketing, you need to determine the value of the "green" moniker; how much you think your customers would pay extra for such (and if they even exist)...  and what you'll do if it turns out your "green" credentials inherited from your jobber don't stand up to muster.  This would be key if "green" was essential to my business plan.  With that, I could then figure out what questions / challenges to put forward to my partner; and what weight to assign the responses I'd get.