Article provided by: Azure Water Bottling of Florida, LLC
Your drink may be the yummiest in the world, but it will not matter if you do not manage your business expenses. Understanding the cost of goods sold will maximize your budget and reduce costs without compromising quality. Azure Water is one of the most recognized beverage development and formulation consultants on the market. Our job is to help you determine your priorities and implement sound business solutions for your beverage company.
What Is The Cost Of Goods Sold?
This refers to the direct costs associated with the production of goods sold by an enterprise. It includes the costs of raw materials, ingredients, packaging, freight, manufacturing, and warehouse expenses in the beverage industry. Indirect expenses such as the cost of marketing, distribution, and sales are not included in the cost of goods sold.
Our company offers beverage product development consultant services to help you determine where you can cut costs. We calculate your COGS to help you gauge how financially stable your enterprise is. Your COGS are unique to your business and are determined by the availability of raw materials, freight, packaging, manufacturers, and warehousing.
Raw Materials and Ingredients Cost
Remember, we deal with food, which has a shelf life. Keep in mind the organoleptic and microbiological changes that can change the quality of the product’s color, taste, odor, and texture. The taste profile of your stored ingredients will start changing, and you will need to decide if you want to sacrifice quality. Any decision you make has an associated risk. If you get rid of your inventory, you will endure a loss, and if you use old ingredients, you compromise your product’s shelf life and quality.
Our years of experience as Orlando food formulation and beverage consultants enable us to handle such issues for our clients. We know that these costs can affect your company. Therefore, we reduce the costs by forecasting your specific needs. Azure Water has established an excellent rapport with local farmers to buy products in large quantities. We also use various strategies to reduce the cost of materials by up to 30 percent. Long-term contracts ensure you are protected by the guaranteed contract price even when prices of raw materials skyrocket.
We understand that buying ingredients in large quantities may not always be possible for startups and small companies. So we forecast your needs and create long-term contracts that allow you a friendlier price point for your beverage in the marketplace.
First-timers in the beverage industry may experience high manufacturing expenses. As they start, they produce low quantities, and the cost per unit at this point is relatively high. When the orders increase, then the co-packing price per unit decreases. We aim to help you succeed by cutting back on your manufacturing expenses.
We are the go-to Orlando beverage development consultants because we are a high-volume co-packer. We also have production plants not affected by tax and union labor structures, ensuring that you keep your expenses minimum. We have built our business by having close ties with key service providers, which helps us minimize our clients’ operational costs.
Please contact Azure Water to get a quote for branded water bottles