How To Start A Drinkware Brand

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Updated: January 18th, 2023

Our gross margins, before ad-spend, are 59% on average.

This is after the cost of goods, shipping, and fulfillment costs have been deducted. The true variable in our bottom line is our ad-spend which can vary month to month based on how competitive the audiences we are targeting are for that specific time period.

For instance, in June, we did $1.1M in sales with a 4x return on ad-spend investment (ROAS) and a bottom line of 33%. In May, because of Father’s Day and Facebook changing their algorithm due to GDPR, we had a 3.1x ROAS and only a 26% bottom line. Around Christmas time, our ROAS can be as high as 6x because our conversion rate goes way up. That is the main variable. Our average bottom line is around 30%.

On average we are seeing around 400-500,000 visitors per month to the website, with a conversion rate of around 4%, and a return customer rate of 15%. Our Facebook is our most powerful asset with over 270k followers and thousands of comments on every single product related post we make.

Kanga

We also interviewed the founders of Kanga.

These guys:

launched a beer cooler
landed a deal on Shark Tank
are doing $1M+/year

Our first initial prototype was made in a mom and pop cut and sew shop. We simply brought a case of beer into the shop and asked if they could make a neoprene sleeve around it and add a zipper to the side.

Naturally, that lead us onto Shark Tank where we pitched our crazy vision to the Sharks and landed a deal with Mark Cuban.

Unhesitantly, they agreed to perform the task and in return kept the case of beer that we brought them. After our initial prototype, we started using a small manufacturer in the USA but knew we would really have to begin manufacturing overseas in order to scale faster in other areas. We hope to manufacture within the US one day.

Once we had a working prototype and launched our first Kickstarter we participated in a campus-wide “Shark Tank” event called “Pitch Smack Down” which was put on by Clemson's Entrepreneurial program and lead professor Dr. Hannon. Dr. Hannon holds a Ph.D. from Cornell and draws in an incredible group of entrepreneurs to judge this event. The year we participated we happened to win first place and use that money to file our patents. We are still patent pending.

A large majority of Americans drink alcohol regularly, with 55.3% of adults boozing at least once a month.

With COVID-19, it’s been reported that alcohol sales have jumped at least 50%.

Solution

While there is certainly a huge market in selling alcohol, it can be very competitive and there is a lot of red tape (liquor license, etc).

But there is one way to capitalize on the alcohol industry as a small business: Drinkware & alcohol accessories!

Lots of ideas for drinkware and alcohol accessories:

Beer Coolers
Thermocoolers
Travel Mugs & Tumblers
Bar & Wine Tools
Wine Chillers
Wine Glasses
Drinking Flasks
Cocktail Kits
Bar Tools & Drinkware
Wine Accessories
Wine Decanters
Barware Tool Sets

Players

Big players

Yeti ($778M revenue)
RTIC - ($200M)
Pelican
S’well ($100M)
Stanley Flasks ($200M)

Smaller players

Startup Costs

Total startup costs: $1,000-$10,000

If you launch an MVP to gauge interest (before doing a production run), costs could be less than $1,000. If you decide to develop the product first, then the cost of goods sold will be the most expensive piece here.

Website: $30
Manufacturing a prototype/first production run: $500-$5000
Initial marketing/advertising costs: $1000-$5000

Market opportunity

There is no shortage to go around in the alcohol industry - it’s expected to reach $1.7T by 2025.

As far as for alcohol accessories, there is growth too:

Searches for “drinkware” hitting peak in last week

Additionally, the drinkware industry is expected to grow every year:

The drinkware industry expected to register a CAGR of 3.1% from 2019 to 2025

The alcohol industry as a whole:

Searches for “high noon” - Barstool’s response to White Claw

The alcohol industry expected to double in most categories by 2025 - source

So what do all these images tell us?

Alcohol isn’t going anywhere. But in order to stand a chance in this crowded space, it’s important that you create something unique and on-trend.

How Much You Can Expect To Make

Yeti is likely a billion-dollar/year business, and RTIC have revenue over $200M/year.

On the smaller end, Brumate does $10M+/year with a couple of employees and a 35-45% bottom line depending on our ad-spend.

Like most e-commerce and household goods, drinkware is likely a low margin business, although it doesn’t have to be.

Regardless, Yeti is a profitable business.

Since drinkware is such a common household item, we’d expect success to come in large volume, low costs, and a focus on branding.

Marketing

Customer advocacy (free advertising)

The best way to grow your business is organically. If your customers love your products, they’ll share them with their friends and on social media.

If you’re selling physical goods, your customers want to see them visually: (snapshot for e-commerce)

This study shows us that visual content from other consumers empowers shoppers to buy.

One great example of this is Yeti Drinkware.

The #yeti hashtag has over 1.5M posts.

This organic Instagram post puts the Yeti logo front and center!

embed:instagram

It also became a bit of a meme:

This video’s generated 1,176,107 views.

Although Yeti played no active part in either of these, they achieved free and instant exposure.

Amazon

Home & Kitchen is the third biggest category on Amazon:

Home & Kitchen #3 on Amazon (February 2019)

Amazon is a huge channel for these brands, with just one of Yeti’s products clocking in at 13k+ reviews!

13,000 reviews translates tomillions in sales.

Social media advertising

Yeti runs ads on Facebook and Instagram, and is actively running ads today.

Here’s a look at some of their ad copy and creative:

If you look closely, you can recognize their tactic of creating multiple versions for their ads with the same copy, but different content in each Ad.

They are likely targeting and A/B testing ads to different audiences and demographics.

Influencers

Although they have strong organic reach, Yeti actively works with influencers.

We found this case study by an influencer marketing company that worked with the brand.

230 posts is nothing compared to their 1.5M posts we found on Instagram, however these posts generated 11.5M impressions.

Examples of influencer posts with a physical brand

Variety

Successful drinkware companies expand to multiple lines of products and versions.

Brumate’s (a smaller player) lineup of products

Launch new products

Since these companies have a large variety of products, they can capitalize on product launches and launching new products to their loyal customers.

These products are often seasonal (coolers for the summer, warmers for the winter/holdiays)

We found a Yeti launch even get covered by Business Insider:

These types of blog posts also contribute to affiliate marketing!

How others are doing it

Brumate

Dylan Jacob started Brumate and has seen some wild success. We got the full story:

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Starting A Drinkware Brand: Everything You Need To Know

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meet the author

Pat Walls

I'm Pat Walls and I created Starter Story - a website dedicated to helping people start businesses. We interview entrepreneurs from around the world about how they started and grew their businesses.

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