Skip to content Skip to footer

3 parameters to consider when negotiating with a new beverage supplier for your import and distribution business

The increasing volumes of bottled beverage consumption across the globe over the last years put pressure over the beverage importers and distributors to extend their portfolio of beverages they import and distribute. In addition, for the same reason, the beverage market suddenly appears appealing to those who are willing to start a new business. Choosing a bottling plant to supply you with alcoholic or non-alcoholic beverages for your new or already established business is a crucial step that will directly influence your success. Below are 3 factors you should definitely negotiate with a new beverage supplier before coming to an agreement.

1. Consider the lead time of bottling plant

This is the time lapse between the acceptance of your order by the bottling plant and the time of delivery of final product to the agreed place. Most beverages belong to the fast moving consumer good (FMCG) category, therefore it is important to ensure that it will not take long for your order to be shipped, especially if consumption of that beverage in your country is influenced by environmental factors. In other words, if beverage business is a seasonal business in your country, you want to ensure that beverages will arrive at the beginning of high season and not at the end of it. Loosing Christmas or summer sales because the product did not make it on time will not only affect your profits but it will also disappoint your clients and consumers. If the transit time from the country of origin to the destination country is around a month and the bottling plant’s lead-time is 3-4 weeks then you should allow at least 9-10 weeks between the confirmation of your order and the cargo customs clearance at the port of destination.

In case you requested for special packaging like

  • special labels,
  • amendments on printed cans
  • amendments on printed shrink packs
  • repackaging into cartons

then you should consider availability of these materials at the bottling plant. Packaging material suppliers apply their own lead-time that will ultimately affect the bottling plant’s lead-time. Also, some of those materials may be produced in a country different from the one the bottling plant is located at, therefore even if you apply some pressure on the bottling plant in order to speed up the delivery of your goods they may not be able to serve you earlier than expected.

2. Minimum order quantities (MOQ)

This is definitely something that you need to discuss with the bottling plant in advance of any order placement. In simple terms, every bottling plant runs at a certain (factory) efficiency. This is defined and measured as the percentage of time the line would need for the production of the output compared to the total time it is available for production. The time needed for production line cleaning, line adjustment and down time due to breakages etcetera reduce the efficiency of the factory that is translated as lost money. This is the reason factories set an MOQ for each product they produce so they can minimise the loss. As an example, a brewery that bottles 500 cans per minute would apply an MOQ that is no less than 2 hours of filling (2h x 60 mins = 120 mins x 500 cans= 60,000 cans or 2,500 packs of 24 cans each) if no other restricting parameters apply. This is because before they start a second filling they will need to adjust the line to the packaging material to follow and clean the line to avoid contamination that will affect product quality of the second product. It is clear that if an order is set to reduce factory efficiency significantly the bottling plant will have to either reject the order or request a compensation by increasing the unit price of goods to the buyer.

3. Ability to respond to big quantities

In contrast to above point 2, if your request is for big quantities of a certain product compared to the daily output of the bottling plant, you need to consider the maximum quantity of final product the bottling plant can supply you with over a certain period of time. Requesting information about the production capacity of bottling plant and how your orders will be accommodated in the production schedule should not be optional. It is reasonable not to expect craft bottling plants to supply the same volume of beverages as industrial bottling plants do.

If you are thinking of a new beverage for your product portfolio then feel free to contact us to discuss any concerns you consider appropriate to help you make an educated decision. Our company supplies the international market with beverages since 1942 so we may already have a solution for you. We can supply you with:

  • Lager beer
  • Strong beer
  • Weiss beer
  • Low alcohol beer
  • Fruit beer / Cider
  • Wine
  • No alcohol beer
  • No alcohol Classic Malt drink
  • No alcohol Flavoured Malt drink
  • Bottled Water

Leave a comment

Welcome to Photiades Exports