Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
How should indie drinks brands approach pricing strategy—setting wholesale discounts, communicating retail price increases, and managing annual wholesale price hikes?
Pricing strategy for indie brands involves three main challenges: wholesale discount structures, communicating retail price increases to consumers, and managing annual wholesale price rises. **Wholesale discount structures and RRP enforcement** - Members recommend working backwards from your recommended retail price (RRP ex-VAT) to set wholesale costs. A **20–30% discount** to RRP is typical starting territory, though this varies by retailer and volume. - Online players like **Master of Malt** consistently undercut RRP due to their margin structure; this is a common industry issue. You cannot legally dictate retail prices—only recommend them—so "RRP" is advisory only under UK competition law. - If a wholesaler is damaging your brand perception through heavy discounting, the option is to raise the price you charge *them*, but be prepared that they may drop the listing. Members report this is a negotiation point, not a mandate. - Contact at Master of Malt: **Julie Trewren** (julie.trewren@masterofmalt.com), ex-Matthew Clark buyer, joined by **Lisa Halstead** as her deputy. **Retail price increases and consumer communication** - The way price increases are communicated to consumers is critical. Members suggest adding modest amounts per bottle (e.g., £1) rather than large jumps, and explaining the cost drivers clearly. - One member who had not taken a price increase for 9 years (at Don Papa) found their first increase was too cautious in hindsight. Major brands are more assertive; for small indies, weigh whether a price increase or margin erosion is more painful long-term. **Annual wholesale price increases** - Most wholesalers require price change notifications by early October for January 1st implementation. - General principle: costs rise, prices should rise; holding back builds long-term margin problems. Buyers will always reject increases initially—that's their negotiating role. - You **cannot discuss price increase levels** with competitors (this breaches UK competition law on cartels and price-fixing). Each brand must set increases independently based on their own cost movements. - Recent inflation has stabilised dry goods after double-digit increases; French importers are estimating **5% maximum** price maintenance depending on volume and negotiations. **New product pricing research** - For launching new products, members recommend **Simon at SH Foodie** (simon@shfoodie.com), who conducts tabletop trials with a few hundred units and is described as helpful and collaborative. This has been useful for brands like Bloody Drinks. **Caveats** - Do not discuss specific price increase percentages with other brands—this is illegal under competition law. - Wholesalers operate on different margin structures than traditional retailers; accept that online discounting is difficult to control.
How should I price a 3-hour corporate cocktail service event when the client has already purchased the stock themselves?
When pricing a corporate cocktail service where the client has already bought the spirits, you're essentially charging for labour, equipment, and setup rather than product margin. Members suggest two approaches: **Cost-plus pricing:** Add up all direct costs (staff wages at standard bar rates, glassware, ice, setup and breakdown) and apply a 50% markup for profit. **Per-head value pricing:** Charge £20 per head for the first hour, then £10 per head for each additional hour. This typically yields £300–£500 for a 3-hour event depending on guest count. Members noted this approach captures the experiential value without relying on product margin. **Key considerations:** - Factor in glassware, ice, bar setup, and your own labour at proper bar rates—these are your actual costs since the client owns the stock - If the client is a high-net-worth corporate (e.g. major finance firms), members suggested pricing at the premium end or above - Members acknowledged this is "difficult" compared to events where you supply and margin the stock, so value-based pricing helps offset the lost product margin One member recommended speaking to **Nick Bar Nation** for detailed guidance on structuring the quote.
How should we position our retail price to account for price barriers, competitor pricing, and margin vs. volume trade-offs?
Price positioning requires balancing consumer perception of value at retail price points against your cost structure and margin targets. **Key considerations:** - **Identify price barriers in your category.** Premium gin, for example, has a perceived ceiling around £30; positioning at £29.99 vs. £30.99 can significantly impact consumer acceptance and volume, even if the cost difference is small. - **Match quality to price point first.** The biggest challenge at launch is ensuring your product quality genuinely justifies the initial retail price in terms of perceived value for money, rather than setting price purely on production costs. - **Be prepared to accept lower margin to stay under a ceiling.** If rising COGs would push you above a key price barrier (e.g., £30 for premium gin), members recommend a commercial decision to reduce margin and stay sub-barrier rather than jump into a lower-volume, higher-price segment. - **Don't live in fear of breaching barriers as costs rise.** Eventually, price barriers break down as most competitors face the same cost pressures. Balance and consideration matter, but don't be afraid to increase price when needed. - **Remember volume vs. premium trade-off.** Higher volumes exist at lower price points (e.g., premium gin vs. super-premium gin), so a price increase may reduce unit sales but improve margin structure. **Caveats:** Price positioning is iterative and tied to retail strategy. Even if you're not selling direct to retailers initially, members recommend thinking about retail shelf price from the outset.