From liquid to logistics: what it really takes to build a successful drinks business

The long road from idea to shelf

The UK drinks industry continues to attract founders and investors for good reason. Premiumisation remains a powerful tailwind across alcohol categories, non-alcoholic alternatives have moved firmly into the mainstream, and changing attitudes around health and moderation have created space for entirely new brands to scale.

Just as importantly, drinks has a long track record as an acquirable, investable category. Strategic buyers actively acquire brands to add to their portfolios rather than build them from scratch, and well-positioned drinks businesses have consistently achieved attractive exit multiples relative to many other FMCG categories. For founders who crack product–market fit, brand positioning, and distribution, the upside is well understood — the acquisition of UK milkshake brand Shaken Udder last year being a recent example.

That opportunity does not come without complexity. Scaling a drinks brand is rarely fast or linear, and the operational demands of physical products are real. But the difficulty is not a signal that drinks is a bad business. It is a filter. The same structural challenges that slow down weaker execution are precisely what allow strong brands to compound value over time.

“Scale doesn’t just cost money – it costs patience,” said Tim Blake, founder and CEO of non-alcoholic spirits brand CROSSIP, whose products are now available in more than 20 markets worldwide. What can look like an overnight success is usually the result of years spent refining assumptions, managing cash carefully, and staying solvent long enough for momentum to build.

For first-time founders, understanding that reality early, matters. The drinks category is competitive, but not chaotic. The category rewards teams that respect its economics, plan for capital intensity, and build brands that can win trust from both consumers and trade partners. Those brands that survive early scaling often face less competition later, and it’s reflected in the acquisition mechanics down the road.

Why drinks businesses can feel harder to fund than other startups

The challenge starts with the business model itself. Compared with many other FMCG categories, drinks can be more cash-demanding. Margins are tighter, inventory has to be funded upfront, and working capital builds quickly as volumes increase. Growth often absorbs cash before it generates it.

Steven Lister, a fractional CFO specialising in drinks businesses, sees the same pattern repeatedly. “The biggest issue is always the balancing act between growth and cash burn,” he said. “Rapid growth is essential to reach critical mass to absorb fixed overheads and move towards profitability as soon as possible but also to attract new investment". However, growth consumes cash, and founders often struggle to optimise expansion within their constrained resources”

As a result, early traction can feel counterintuitive. Increasing production, signing distributors, or entering new markets frequently raises cash pressure rather than easing it. What looks like progress on the surface can temporarily make the business more fragile until scale efficiencies begin to show. The trade-off is that once distribution and consumer habit are in place, those positions are difficult for competitors to dislodge. Brand is a moat, but one that requires patience to dig.

Why brand, founders, and execution matter more than hype

Drinks is often described as a simple business: buy ingredients, turn them into something desirable, add a margin, and sell at scale. That simplicity is misleading and does a disservice to those drinks startups who overcome the many hidden challenges, that without astute action can compound quickly to failure.

Lister points to three recurring mistakes that he sees in the early stages: overestimating sales forecasts, underestimating cost of goods sold and distribution costs, and overlooking how long fundraising actually takes. Each strains cash flow, and once pressure builds, founders are forced to shift attention from growth to survival.

What makes this more acute in drinks is that founders have fewer safety nets. Non-dilutive funding and grants are less accessible than in deep tech or software. There are few patents, protected IP, or PhD-level technical moats to point to. Barriers to entry are relatively low, albeit the barriers to scaling well are high.

Investors in drinks are not underwriting technology risk. They are backing founders, brand, and the ability to execute. While that sets a high standard, it also gives founders direct control over what drives conviction in their business, and those who understand this early can turn this into a lasting advantage.

Knowing when scale is helping – and when it isn’t

While unit economics do improve in many drinks businesses, they often do so more slowly than in lighter FMCG categories, particularly those without cold-chain logistics, on-trade reliance, or complex production runs. Lister notes that margins are frequently lower than planned, particularly where brands rely heavily on grocery channels or face unexpected production cost increases.

The danger is not that economics never scale, but that founders fail to spot early signals that reality is diverging from the plan. Margins that consistently sit below projections, variable costs that refuse to fall with volume, or slower-than-expected turnover in key channels are all warnings that strategy needs to adjust.

These signals matter because in FMCG, cash pressure is structural. Inventory commitments, storage costs, and sub-optimal production runs can all erode working capital quickly if demand forecasts are wrong. Once growth slows, attracting investment to break the cycle becomes significantly harder.

This is where disciplined forecasting becomes less about optics and more about survival.

Forecasting as a decision tool, not a performance for investors

From a CFO’s perspective, “good” forecasting is not about building the most detailed model possible. It is about creating something founders can actually use. “Founders need a model detailed enough to capture the key performance drivers, but simple enough to be prepared and updated quickly,” Lister explained. Overly granular forecasts often become mechanical exercises, while overly simplistic ones miss critical insights.

For many drinks startups, a rolling three-month cash flow forecast can strike the right balance, as long as the business has a solid cash runway. It forces teams to revisit assumptions regularly without becoming consumed by spreadsheets. If cash tightens and the runway shortens, however, weekly cash flow visibility becomes essential. Forecasting needs to flex to match the frequency the business requires at any given time.

Investors, meanwhile, are not expecting certainty. At Seed and Series A, they are looking for evidence that founders understand their unit economics, cash flow dynamics, and funding needs – and that they are managing them proactively. Confidence in the team still matters more than perfect numbers, but financial literacy has become table stakes.

Scaling without breaking what made the brand work

If finance is one axis of complexity, brand integrity is another. For CROSSIP, scaling production forced early clarity on what could not change. “The flavour has always been the constant,” Blake said. While volumes increased dramatically, the liquid itself remained consistent – even as production processes evolved to meet new demands.

Scaling surfaced problems that simply did not exist at small batch sizes. Each became a decision point: fix it, improve it, or redesign the process entirely. Done well, those moments created opportunities to tighten costs and understand COGS in greater detail rather than diluting quality.

The same discipline applied to brand. As the business expanded, Blake found it essential to define what was non-negotiable and what could flex. Protecting the essence of the product while allowing its expression to adapt to different markets became central to growth.

“You have to be comfortable being a cultural chameleon,” Blake said. “That means accepting cultural nuance and market dynamics while still holding a very firm line on the core product, the quality, and the story behind it.”

International expansion without the myth-making

International growth is often portrayed as a dramatic leap. Blake’s experience was more pragmatic, but still daunting at the outset. Early on, he assumed expanding overseas meant recreating the entire UK operation in each new market. “That feels heavy, expensive, and frankly quite intimidating,” he said. The reality was very different.

“You’re not building a mini-UK every time,” Blake explained. “You’re essentially doing what you already know how to do: making a smart sales deal, just with a partner in another country” .

Across Europe and North America, the fundamentals proved remarkably similar. Bars face the same challenges. Consumers want broadly the same things. What differed was the brand landscape. Brands that feel dominant in the UK can be almost irrelevant elsewhere, and vice versa. Letting go of home-market assumptions opened up opportunity.

Distribution is strategy, not logistics

Few decisions shape a drinks business more than distribution, and few are harder to reverse. CROSSIP’s position – non-alcoholic, but sold primarily on-trade – meant there was no obvious distributor archetype that automatically fit.

What mattered was alignment. With around 90% of sales in hospitality, distributors geared towards supermarket listings or e-commerce were rarely right, regardless of how strong they looked on paper. “Alignment matters more than category labels,” Blake said.

Operational scale on the ground also mattered. One-person distributors covering entire countries were a red flag. Drinks are “liquid on lips” products. Without tastings, advocacy, and feet on the street, growth stalls.

The clearest warning sign, though, was over-promising. Unrealistic sales projections signalled a lack of understanding rather than ambition. Sustainable growth came from partners who were ambitious but honest, and who communicated that clearly and consistently.

Why FMCG fundraising plays by different rules

All of this feeds into a fundraising environment that reflects the realities of branded consumer businesses, where proof is earned through traction rather than promised through narrative. Within FMCG, drinks sits at the more capital-intensive end of the spectrum, but its also the clearest when it comes to what ‘good’ looks like which means equity capital becomes the primary fuel much earlier.

Investors are not betting on technology breakthroughs. They are betting on execution, brand-building, and resilience. As a result, traction expectations are higher. For many institutional investors and VCs, revenues north of £1–2m are often the starting point for meaningful engagement, not the end goal.

Until then, fundraising is typically relationship-led. Angels and early believers dominate the cap table – people who understand that consumer brands are won over years, not quarters. In that sense, raising capital in FMCG is less about a single “round” and more about earning conviction, credibility, and patience over time.

Capital as the quiet differentiator

Lister is blunt about what separates drinks companies that break through from those that plateau. “Access to capital is often the defining factor,” he said. “Many founders have strong products and ideas, but only those who can engage investors effectively and secure sufficient funding can consistently execute brand-building, marketing, and scaling strategies” .

Blake’s experience reinforces that view. Looking back, he believes the biggest underestimated cost of scaling was time. What founders think will take one month often takes six. Brand maturity, trust, and distribution routes cannot be rushed, and all require the business to stay afloat enough for progress to compound.

Investor expectations have shifted accordingly. The era of growth at any cost has faded. Today, sustainable and credible business models matter more, making cash-flow planning and adaptability critical.

Fundraising as an ongoing process, not a moment

In that environment, fundraising rarely feels like a clean milestone. Blake describes it as building a circle of believers gradually – raising from an initial group, returning to those who already understand the brand, and layering in new supporters over time.

One of the hardest challenges is that progress is often visible on the ground long before it shows cleanly in sales figures. Listings, conversations, and momentum accumulate ahead of revenue. Learning how to present that progress honestly, without over-selling, becomes a core founder skill. Above all, choose investors who understand that FMCG businesses compound slowly and unevenly.

In a crowded market full of ambition, the drinks brands that endure tend to share a quiet advantage: they understand the model they are building into. Drinks is not an experimental category or an unproven asset class. It is a mature, global market with a long history of strategic acquisitions, repeat buyers, and premium outcomes for brands that combine clear positioning with disciplined execution. The long timelines are not a flaw in the category, they are precisely why strong brands can compound real value once they break through.

Founders who understand that reality early tend to make better decisions. They raise with clearer expectations, dilute less by planning capital needs realistically, and choose partners who understand that progress in FMCG is measured in momentum and credibility, not just quarter-on-quarter spikes. That preparation does not remove the hard work, but it turns patience and discipline into value-creating traits rather than survival tactics.

For founders willing to respect the fundamentals and build with time in mind, drinks remains a category where ambition is still well-rewarded, not despite the long road, but because of it.

TL;DR - The long game behind the label

For UK founders raising in the drinks sector, the lessons are:

• Drinks is capital-intensive, but structurally attractive for investors
• Drinks remains one of the most active FMCG categories for strategic acquisitions
• Assume the model will be capital-intensive from day one
• Treat cash burn as structural, not a temporary problem
• Get ruthless about unit economics and working capital, founders that master this will unlock premium outcomes later
• Forecast regularly and use models as decision tools
• Choose distributors for alignment, not reputation
• Raise equity with time in mind, not just milestones
• Focus on credibility and conviction as much as headline growth