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The Start-Up Drinks Lab's innovative solution for small-batch drinks production

Bottling facility at The Start-Up Drinks Lab

The Start-Up Drinks Lab's innovative solution for small-batch production

Two Scots entrepreneurs formed The Start-Up Drinks Lab to tap into a market opportunity for small-batch drinks manufacturing. Here we share 12 tips from their journey - from startup to successful co-operative.

1. Spot a gap in the market

That's exactly what two Scots entrepreneurs, Hannah Fisher and Craig Strachan, did.

The Scottish drinks market has seen a significant increase in demand for craft beers and artisan spirits in recent years. There’s also a growing consumer trend for alcohol-free alternatives, reflecting healthier lifestyle choices and the introduction of stricter drink-driving laws.

Responding to this trend, Hannah and Craig developed their own startup soft-drinks brands. However, they both discovered there was nowhere locally to bottle their low-volume runs. Spotting this gap in the market, they set up The Start-Up Drinks Lab to provide small-batch bottling facilities to other craft drinks producers - a service previously unavailable in Scotland.

2. Finding a partner really helps

Hannah and Craig met through a Scottish business incubator, Entrepreneurial Spark, and found they had the same business challenge. A challenge that was putting product quality, competitiveness and growth potential at risk. 

Working together identified a cost effective, innovative solution.

With very different backgrounds they were able to draw on each others talents and experience. Hannah had a wealth of drinks marketing experience, working for Tennents, Beam Suntory and Morrison Bowmore. While ICAS Chartered Accountant, Craig had left the industry to set up his own drinks brand.

Their collaboration has not only succeeded in meeting its objectives, it's also resulted in the creation of an innovative and unique Scottish business, turning over £300k plus in its first year.

Craig Strachan and Hannah Fisher, co-founders of The Start-Up Drinks Lab
The Start-Up Drinks Lab - Hannah Fisher and Craig Strachan

3. Identify and solve a business pain point

The first challenge they shared when launching their drink brands was the inability to bottle their product in small numbers.

They quickly realised that Scotland lacked facilities for creating and distributing new drinks products. This was a major drawback, both for themselves and other Scottish drinks entrepreneurs.

"It was clear we weren’t alone in finding Scotland’s lack of small-scale production facilities was a massive problem. Many great Scottish brands were being forced to go down South, losing that all-important 'Made in Scotland' marketing asset, pushing costs up, and making them less competitive," Hannah explained.

So, they decided to set one up together and provide services for other drinks startups.

4. Stay focused, be committed

Setting up and scaling a business requires continual innovation and hard work. Helping others has definitely been part of the driving force behind The Start-Up Drinks Lab.

"We’re committed to supporting Scotland and Scottish produce by giving producers an accessible, affordable platform," said Hannah.

The Start-Up Drinks Lab was founded in 2017 when Hannah and Craig formalised their collaboration as a consortium co-operative. They opened the doors of their production facility in Port Glasgow in May 2018.

Unlocking Ambition entrepreneur Hannah Fisher, Founder of The Start-Up Drinks Lab receiving an award from Steve Dunlop, Chief Executive of Scottish Enterprise.

5. Choose the right business model

Hannah and Craig believe its formation as a consortium co-operative has been key to the success of The Start-Up Drinks Lab.

Consortium co-operatives are set up when businesses come together for a shared purpose to buy or sell in scale, manufacture or market more efficiently, share facilities, or jointly bid for contracts. By collaborating, businesses can reduce costs, share risks, and create new platforms for growth.

The biggest benefits of working with others, Hannah feels, is sharing experiences and learning to overcome challenges.

"By forming our consortium co-op, we brought together our different and complementary skills as well as our shared values and vision for a manufacturing facility that directly benefits small-to-medium sized producers," explained Hannah.

"Regardless of business type and industry, the challenges are the same, therefore the approach to problem solving can be shared. It opens networks – the co-operative can recommend trusted, fit-for-purpose suppliers," she added.

6. Get the right advice and support

The entrepreneurial pair have always taken advantage of Scottish business support. Right from the very beginning they knew how important this was.

Hannah and Craig’s efforts to set up The Start-Up Drinks Lab received a major funding boost when they won our Collaboration Prize in 2016, after successfully pitching their plans and potential to grow the business.

And thanks to a package of support provided by our specialists, Co-operative Development Scotland, Hannah and Craig were able to bring their plans to fruition - to set up their consortium co-operative, rent their Port Glasgow facility and fit it out to a fully operational specification.

"The support of Co-operative Development Scotland provided validation of our original business concept and initial proposals," said Hannah. "At that time, the support was transformational – enabling us to take our plans to the next level and accelerate our launch. Together we’ve been able to create something truly unique and far beyond what we could have hoped to achieve on our own."

Collaboration can be a great way to grow your business - see how we can help

7. Find an equity investor

If your business needs money to grow, one of the options open to you is issuing new shares in exchange for investment.

A huge breakthrough for The Start-Up Drinks Lab was securing a six-figure investment from convenience store operator, Scotmid, in return for an equity stake in the business. It helped them develop and grow a unique range of products and services.

To make this investment possible, The Start-Up Drinks Lab enhanced its original consortium co-operative business model with an equity-based structure.

Is equity funding right for you? Read our guide

8. Win Unlocking Ambition support

The Start-Up Drinks Lab also took advantage of support through our Unlocking Ambition Challenge - a £4 million Scottish Government fund that provides the best support to Scotland’s most talented, innovative and ambitious entrepreneurs to help them accelerate the growth of their businesses. This includes:

  • A one-year programme of world-class executive education
  • Executive leadership coaching
  • Guidance on developing international connections through our GlobalScot network
  • A dedicated account team of digital, research and financial specialists

Each Unlocking Ambition company received a £25,000 grant award at the outset to invest into their start-up in whichever way they wished. The Start-Up Drinks Lab successfully secured a further £35,000 through the Unlocking Ambition Development Fund which supports innovative, high-impact growth projects.

Access to expert guidance is essential for any startup. The personalised advice and support we’ve received through Scottish Enterprise, Co-operative Development Scotland and Inverclyde Business Gateway has been invaluable – without that we wouldn’t be in the strong position we are today.

Craig Strachan, co-founder, The Start-Up Drinks Lab

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9. Keep innovating

After setting up its initial bottling line and trial kitchens, The Start-Up Drinks Lab launched its own brand cola, tonic mixer, a non-alcoholic rose wine alternative, and developed a range of innovative services.

It now offers a complete 'concept to shelf' facility for producers of new drinks products, whether they are startups trying to get off the ground or established businesses aiming to expand their ranges.

Clients are supported at every step of a product’s lifecycle - from brand creation and recipe development, to small volume drinks production, bottling and labelling.

Recent diversification means the company also offers small-batch alcoholic drinks manufacturing that compliments their soft-drinks production line.

10. Support the dreams of others

Helping others to grow their own businesses is at the heart of The Start-Up Drinks Lab philosophy. So, when we put them in touch with another company with entrepreneurial dreams, Hannah and Craig happily stepped in.

Molly Rose McLean is the UK's youngest CEO. Her company Molly Rose Drinks sells low-sugar, no-fizz lemonade with 10% profits going to children's charities..

Watch our video to hear how The Start-Up Drinks Lab and Scottish Enterprise grant support are helping Molly take her ambition and dream to the next level.

11. Build resilience to scale up

The Start-Up Drinks Lab has achievements to be proud of. Sainsburys stock its products, and they have industry giants such as Brewdog, Diageo and Hilton as clients. From this strong foundation, expansion plans include:

  • Taking on another factory unit and adding to its production lines
  • Introducing a drinks-canning machine
  • Investing in faster small-batch bottling equipment

With continuing Brexit uncertainties, it’s vital that businesses act now to put themselves in the strongest possible position to adapt and thrive. So, we asked Hannah what impact Brexit might have on The Start-Up Drinks Lab?

"Restricted and more expensive supply of raw material will have a negative impact,” she said. "Looking for a positive, we hope our new canning line will attract some of the clients that currently use canning companies in Germany and Belgium due to restricted trade.

"We’ve already taken actions to prepare for Brexit including bulk buying glass bottles. And we’ve also accelerated our expansion into canning-facilities so we can adapt quickly to opportunities," she added.

Get Brexit planning support for your business at PrepareforBrexit.scot

12. Invest in people, technology and markets

With expectations of doubling its staff and diversify to grow the business. Hannah and Craig are looking into offering shared distribution, particularly overseas, ecommerce site support and storage facilities.

The lack of small-batch drinks production facilities is not just an issue within Scotland. There’s a dearth of services internationally. So, looking ahead, Hannah and Craig have their sights set further afield.

Their longer-term plans feature geographical expansion into the rest of the UK, then beyond into Europe and even North Europe. And based on how quickly and effectively The Start-Up Drinks Lab has met and exceeded its initial business goals, its ambitions to broaden its horizons significantly look well within reach.

Need help growing your business?

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