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 producers negotiate with packaging suppliers when facing significant cost increases?
Members face substantial cost increases from glass suppliers (ranging from 9.5% to 20%+), but pricing negotiations require careful handling. **Key suppliers and their increases:** **Saver Glass** reported 9.5%, **Allied** at 20%, and **Bruni** positioning between the two. **Berlin** has also tightened supply (no stock until Feb 2022 in one case), forcing some to find alternatives. **Recommended tactics:** - **Collective solidarity approach** — Members suggested that individually they are small customers to major glass companies, but combined they represent stronger negotiating power. A coordinated approach to suppliers could soften price increases more effectively than individual negotiation. - **Keep sourcing options open** — Maintain multiple supplier relationships and always have a BATNA (best alternative to negotiated agreement) ready when suppliers apply pressure. - **Don't pass increases directly to consumers** — Members warned that consumers won't accept sizable price rises and will switch to competitor brands in their price point. Retail and on-trade buyers have the same mentality and won't accept rises that affect market fit. - **Beware of cartel concerns** — Members explicitly flagged that sharing pricing discussion or coordinating price increases could constitute cartel behaviour and should be avoided. Cost of goods information and response is acceptable; pricing discussion is "a no go." **Caveat:** The pressure is real—producers are caught between supplier increases and market resistance to price rises, creating a "bumpy ride." The best defence is keeping sourcing options as open as possible.
What gross margin should I expect on retail gift packs (bottle with glassware or accompanying items), and is it worth the effort?
Members report **gross margins of 45–50%** on bottle/glassware gift packs when sold through retail. However, the community consensus is cautious: **Margin reality:** - Gross margin is similar or worse than selling a single bottle alone, despite higher retail shelf price (typically £25 RRP for a pack sold at £11–£12 wholesale) - **Cardboard and assembly costs are significant** and erode per-unit margin substantially - Cardboard costs drop sharply with volume, creating a trap: the temptation to over-order in bulk leads to excess stock write-offs if sales underperform **Operational challenges:** - Gift packs are labour-intensive to assemble (in-house or outsourced cost) - Damage in post is common, eating into already-thin margins - Real-world performance is poor: one member ordered 1,000 units for Christmas and sold only ~100, losing money overall **When to do it:** - Members recommend gift packs primarily as a **brand awareness and seasonal tactic** (Christmas peaks), not for margin - **Minis/smaller gift sets are growing**, suggesting better ROI at lower price points - Margin is "really just to try and tap into gifting peaks" **Bottom line:** Margins are adequate on paper but are offset by operational friction, wastage risk, and poor sell-through. Only pursue if strategic value (brand lift, seasonal revenue spikes) justifies the effort.