Expert: Eric Hofer - 6/5/2011

Question
Dear Sir,

With my knowledge of supplements, I'm seriously considering produce a line of beverages that utilize certain supplements to meet particular symptoms/conditions.  For example, I'd like to produce a drink that can be drunk alone and is refreshing, but maybe most importantly used as a tasty mixer in alcohol to minimize the effects of a potential hangover. Another idea is "happy" drink.  This is a drink to boost serotonin levels.  Another idea is a "detox" drink to help clean the daily pollutants. I've contacted some developers and manufacturers (to include bottling), however my main concern would be distribution.  I understand a distributor would have to feel the brand they choose to distribute is worthy of distribution.  My questions are: In your experience, do these types of nutraceutical beverages seem worthy to distributors? How would I know a good distributor when I find one? And also, what is reasonable compensation for a distributor?  

Thank you.  I appreciate any help you may offer.

Answer
Hello Jessica,

Interestingly, we've been chatting with a company who have developed a drink for the morning after.  In our research we found that this niche is poorly served and would welcome product development in several countries.  While we didn't ask specifically about "happy" drinks, I suspect such would also have traction.

Finding distributors is an art.  The formula or attributes of what makes a distributor "good" is/are elusive.  It depends upon many factors: your needs, state of development, cash flow & funding, bargaining position, geographic proximity, brand recognition, track record, terms, competitive brands, internal/external sales organization, etc.  I suggest you list out what are your key needs, position, expectations.  Also, work with a brand developer to highlight what they think you need.  Armed with that, you can investigate what's on offer.

As to compensation, this depends upon your terms, returns policy, marketing, price point, whether they offer a sales force that can work your product.  I've seen ratios as low as 30% markup, ranging to 150%.