Do not neglect these necessary expenses when developing your new beverage

Launching a functional beverage might sound as simple as “choose a recipe, fill cans, and start selling.” In reality, there are many costs brewers and distillers often overlook when developing a functional beverage. Production partnerships, packaging sourcing and regulatory compliance often eat up far more margin than expected. The following is a breakdown of the expenses you need to factor in when building your functional beverage plan.

The co-packer dilemma: Convenience and major minimums

For many small brands, using a co-packer (contract manufacturer) is the most practical path to avoid buying expensive bottling or canning equipment. However, that convenience comes with tradeoffs. Co-packer setup fees and minimum order quantities (MOQs) can be daunting. Typical first-run production costs through co-packing services range widely, but may run $10,000–$50,000 for an initial batch. Moreover, MOQs may demand thousands of units per SKU, even before you know if the product will sell, which creates some upfront risk you should consider. You pay for production, packaging and co-packer fees without assured distribution or sales. Brewers and distillers with their own existing equipment have a great advantage here. 

Packaging: From plain cans to premium presentation

Once you have a co-packer, the next major variable is packaging. The type of container you use can drastically change costs. Aluminum cans, glass bottles, sustainable packaging and other options all come with a price. For beverage launches, typical per-unit packaging costs can find aluminum cans costing between $0.12–$0.19 per can (depending on size and print complexity). Glass bottles or premium sustainable containers run considerably more. Beyond the container itself, there are caps/closures, labels, secondary packaging (cases, cartons, multipacks), and finishing touches (specialized printing, shrink sleeves, retail-ready displays). These can push packaging costs up, sometimes making packaging represent 10-15% (or more) of retail price.

Finally, many packaging suppliers require MOQ orders for containers, labels, caps and secondary packaging before your first run. So be prepared for upfront inventory investment before selling a single unit. 

Compliance, testing and regulatory overhead

With functional beverages, regulatory compliance is not optional. Whether you are selling basic drinks or botanical tonics, you must ensure safety, accurate labeling and compliance with food/beverage regulations. That translates into lab testing and documentation costs. A single product may require a full suite of testing (microbiological, shelf-life, chemical, nutritional analysis, packaging migration tests, etc.), often totaling thousands of dollars initially. Skimping here can lead to costly mistakes: product recalls, failed inspections or an inability to sell inventory. 

Here are some tips to manage unexpected costs:

• Know your minimum order thresholds and plan accordingly: Choosing a co-packer means committing upfront to their MOQs so ensure you can store or sell that volume.
• Budget for packaging beyond just cans/bottles: Labels, closures, secondary packaging, design and compliance all add up.
• Prioritize compliance early: Testing, label compliance, certifications are all essential. Budget for them as soon as you begin formulation, not later.
• Scale carefully and strategically: Try to structure early runs to spread fixed costs over as many units as possible. But don’t overproduce before market demand is proven.

The “hidden” costs behind co-packing, cans and compliance often represent the make-or-break line between a sustainable beverage business and one that struggles under cash-flow pressure. Underestimating these costs can sink a launch before it gains traction. If you’re planning a beverage launch (functional soda, tonic, botanical drink or other), treating co-packing, packaging sourcing and compliance as first-order line items is essential. At Volunteer Botanicals we can help you develop a plan that incorporates all these needed elements through our Beverage Accelerator Program.