How to Start a Beverage Business in India?

The beverage industry covers a wide range of products. Requirements vary based on the product, ingredients, manufacturing process, and label claims.

FSSAI has introduced several important changes for packaged drinking water along with other beverages:

• Mandatory BIS certification is no longer required. These products are regulated under FSSAI and classified as High-Risk Food Categories, with pre-licence inspections, annual inspections, a Scheme of Testing effective 1 January 2026, and five-year record retention. For detailed requirements, see our guide on FSSAI licence for packaged drinking water.
• BIS certification: Mandatory BIS certification is no longer required for packaged drinking water and mineral water. These products are now regulated under applicable FSSAI requirements.
• High-risk food category: By order dated November 29, 2024, FSSAI classified packaged drinking water and mineral water as High-Risk Food Categories under its Risk-Based Inspection Scheduling policy.
• Pre-license inspection: Inspection is mandatory before the applicable FSSAI license is granted.
• Annual inspection and audit: Annual inspections apply to these businesses. Centrally licensed manufacturers in high-risk categories must also undergo an annual third-party food safety audit.
• Scheme of Testing: A detailed Scheme of Testing took effect on January 1, 2026, under FSSAI's order dated December 17, 2025. Manufacturers must maintain test records and follow the prescribed testing requirements.
• Monthly microbiological testing: Manufacturers must conduct monthly testing for specified microbiological parameters. These include coliform bacteria, faecal streptococci, Staphylococcus aureus , Pseudomonas aeruginosa , yeast and mould, Salmonella, Shigella, and specified Vibrio species.
• Non-compliance: Microbiological non-compliance requires investigation and corrective action. Production can resume after satisfactory corrective action and five consecutive satisfactory batches, as applicable.
• Record retention: Records relating to testing and non-compliance must be retained for five years.
• Fruit juice claims: FSSAI has directed food businesses to remove " 100% fruit juice " claims from labels and advertisements. The Advertising and Claims Regulations do not provide for such a claim.

Starting a beverage business involves product research, formulation, testing, manufacturing, compliance, packaging, and distribution. The exact requirements depend on the beverage category, manufacturing model, premises, and sales channels.

The following steps cover the main stages involved in launching a beverage business in India:

1. Research the Market and Choose the Product

Start by identifying the beverage category and target customers. Study existing products, prices, packaging, distribution channels, and competing brands.

Consider:

• Beverage category and product format
• Target customers and their preferences
• Competitor products and pricing
• Expected selling price
• Sales channels
• Product shelf life and storage requirements

This research helps define the product and its expected price before production begins.

2. Develop and Test the Formula

Develop the beverage formulation based on the product category, ingredients, intended shelf life, and applicable food standards.

Testing may cover:

• Ingredient and formulation specifications
• Microbiological parameters
• Chemical or physical parameters
• Shelf life and stability
• Taste and product consistency

Keep the final formulation and test reports documented for production and quality control.

3. Choose the Manufacturing Model

Decide whether to manufacture the beverage in your own facility or use a contract manufacturer.

• In-house production: Requires investment in premises, equipment, utilities, staff, and quality-control systems.
• Contract manufacturing: An existing manufacturer produces the beverage according to agreed product specifications.

Before selecting a manufacturer, verify its FSSAI authorization, production capacity, minimum order quantity, quality systems, testing facilities, packaging options, and delivery timelines.

Document the formulation, ingredient specifications, quality requirements, packaging, batch records, and responsibilities of each party in the manufacturing agreement.

4. Choose and Register the Business Structure

Select a business structure based on ownership, investment, liability, and plans. Common options include:

• Sole Proprietorship
• Partnership Firm
• Limited Liability Partnership (LLP)
• Private Limited Company

Complete the applicable registration and obtain PAN and other required registrations.

5. Obtain the Required Registrations and Approvals

The applicable registrations depend on the beverage, turnover, premises, and business activities. These may include:

• FSSAI Registration or License: Required for food and beverage businesses. From April 1, 2026, Registration applies up to ₹1.5 crore turnover, State License above ₹1.5 crore up to ₹50 crore, and Central License above ₹50 crore. Product-specific standards, testing, labeling, and safety requirements also apply.
  • Caffeinated beverages: Must meet prescribed caffeine limits and warning requirements.
  • Energy drinks: The product name must meet the applicable FSSAI standard.
  • Novel ingredients: Prior approval may be required for non-specified food ingredients under the Food Safety and Standards (Approval for Non-Specified Food and Food Ingredients) Regulations, 2017.
  • Proprietary foods: Products that do not fall under a standardized food category may be subject to the Proprietary Foods Regulations.
• GST: GST registration is generally required once the applicable turnover threshold is crossed. For most businesses supplying goods, the threshold is ₹40 lakh, with a ₹20 lakh threshold in specified states, subject to applicable exceptions and compulsory registration provisions. After the September 2025 GST rate restructuring, beverage GST rates range from 0% to 40%, depending on the product's formulation and classification.
• EPR Registration for Plastic Packaging: Producers, Importers, and Brand Owners using plastic packaging may need to register under the applicable Extended Producer Responsibility requirements.
• Legal Metrology Compliance: Pre-packaged beverages must carry required declarations such as net quantity, MRP, manufacturer or packer details, and consumer care information.
• Pollution Control Consent: Manufacturing units may require Consent to Establish and Consent to Operate from the relevant State Pollution Control Board.
• Groundwater Extraction NOC: A bottling unit using groundwater may require an NOC from the Central Ground Water Authority, subject to applicable groundwater regulations.
• Factory and Local Approvals: Depending on the location and operations, businesses may need factory registration, fire approval, local trade licenses, and other premises-related approvals.
• Product-Specific Standards and Testing: Certain beverages may require additional standards, testing, labeling compliance, or certifications based on their composition and intended use.

Check the requirements for the specific beverage before starting commercial production.

6. Choose and Protect the Brand

Choose a distinctive brand name after checking existing trademarks. Consider registering the brand name or logo under the appropriate trademark class for the beverage products.

• Trademark Protection: Trademark registration is not mandatory to start the business. However, registration provides statutory protection for the registered mark.
• Contract-Manufacturing Agreement: If a third-party manufacturer produces the beverages, use a written agreement that clearly defines the responsibilities of both parties. Key terms should cover:
  • Formula ownership
  • Brand ownership
  • Minimum order quantity (MOQ)
  • Batch size
  • Quality specifications
  • Product rejection and recall responsibility
  • Testing responsibility
  • Packaging procurement
  • Confidentiality
  • Product liability
  • Delivery timelines
  • Payment terms

7. Finalize Packaging and Labeling

Select packaging based on the beverage, shelf life, storage conditions, transportation, and target market.

• FSSAI labeling: Follow the Food Safety and Standards (Labelling and Display) Regulations, 2020 , along with applicable product-specific requirements. The label should include the required product name, ingredient list, nutrition information, allergen declarations, veg or non-veg symbol, FSSAI logo and license number, batch or lot number, date marking, storage instructions, and other applicable declarations.
• Claims and warnings: Any nutritional, health, or other claims must comply with the applicable FSSAI requirements. Certain beverages may also require specific warnings or declarations, such as those for added caffeine.
• Legal Metrology: Pre-packaged beverages must comply with the Legal Metrology (Packaged Commodities) Rules, 2011. Required declarations can include the manufacturer's or packer's details, generic product name, net quantity, date-related information, MRP, consumer care details, and unit sale price, as applicable.
• Packaging requirements: Packaging materials must also comply with the applicable FSSAI Food Safety and Standards (Packaging) Regulations, 2018.
• Final label check: Review the complete label against the applicable FSSAI, Legal Metrology, product-specific, and claims requirements before sending the packaging for commercial printing.

8. Set Up Production and Quality Controls

Set up the production process according to the beverage and manufacturing model. Key areas include:

• Production setup: Arrange the required equipment, raw materials, storage, filling, and packaging facilities.
• Staff and training: Assign responsibilities for production, quality control, inventory, sales, and compliance. Train staff in food hygiene, sanitation, and relevant SOPs.
• Quality control: Check raw materials, production batches, hygiene, storage, and finished products.
• Product testing: Conduct microbiological, chemical, pH, and other product-specific tests where applicable.
• Record keeping: Maintain batch records, ingredient records, test reports, and other production documents for traceability and quality control.

9. Plan Pricing, Sales and Distribution

Set the selling price after considering production, packaging, GST, logistics, distributor and retailer margins, and marketing costs.

• Calculate Production Cost: Include ingredients, labor, utilities, manufacturing, testing, wastage, and other production expenses.
• Calculate Packaging Cost: Include bottles, cans, caps, labels, cartons, and other packaging materials. Factor in packaging compliance and EPR costs where applicable.
• Factor in GST: Identify the applicable GST rate based on the beverage's classification and formulation. Include GST when calculating the final consumer price, distributor price, and margins. Beverage GST rates can vary from nil to 40% under the post-September 2025 rate structure.
• Calculate Distribution Costs: Consider transportation, warehousing, storage conditions, distributor margins, retailer margins, and payment terms.
• Plan Marketing Costs: Include advertising, promotions, marketplace fees, sampling, and other customer acquisition costs.
• Set the Selling Price: Compare the total cost with competitor pricing and your target margins. Check that the final price remains commercially viable after applicable taxes and channel margins.

Choose sales channels based on your target customers and product. Options include:

• Retail stores and supermarkets
• Restaurants and cafés
• E-commerce platforms
• Direct-to-consumer sales
• Distributors and wholesalers

Consider minimum order quantities, storage, transportation, distributor margins, GST treatment, and payment terms when planning distribution.

10. Launch and Market the Product

Complete the required registrations, testing, packaging checks, and production arrangements before commercial sale.

Promote the beverage through relevant online and offline channels, such as social media, e-commerce listings, retail promotions, product sampling, and local partnerships. Monitor sales, customer feedback, inventory, and product quality after launch to improve future production and marketing decisions.

The cost of starting a beverage business varies by product, production model, packaging, number of SKUs, and sales strategy. A contract-manufacturing launch may require around ₹10 lakh to ₹60 lakh for an initial commercial launch. A dedicated manufacturing plant can require substantially higher investment, depending on capacity, automation, location, and infrastructure.

The main costs for a contract-manufacturing launch may include:

These figures are indicative estimates and can vary based on the beverage category, formulation, number of SKUs, minimum order quantity, packaging, production volume, and distribution strategy.

Example: How a Beverage Brand Makes Money

Suppose a beverage brand launches 10,000 bottles of a drink through contract manufacturing.

• Manufacturing and packaging cost: ₹25 per bottle
• Total product cost: ₹2.5 lakh
• Brand's selling price to distributors: ₹45 per bottle
• Sales revenue: ₹4.5 lakh
• Gross contribution before marketing, logistics, GST, and other overheads: ₹2 lakh

If the brand sells the bottles directly to consumers at ₹80 each, its gross revenue would be ₹8 lakh before applicable taxes, discounts, delivery costs, marketing expenses, and other overheads.

This shows why beverage profitability depends not only on the production cost but also on pricing, GST, sales channel, margins, marketing costs, and sales volume.

A beverage business needs consistent production, reliable suppliers, proper storage, and efficient distribution. Some challenges can arise while managing these areas:

• Maintaining product quality: Keeping the taste, texture, ingredients, and other product specifications consistent across batches can require regular quality checks.
• Managing shelf life: Beverages may require controlled storage and suitable packaging to maintain quality and safety throughout their intended shelf life.
• Managing suppliers and production: Delays in ingredients, packaging materials, or contract manufacturing can affect production schedules and inventory.
• Controlling costs: Minimum order quantities, packaging, storage, transportation, and marketing can increase working-capital requirements.
• Building distribution: Getting products into retail stores, restaurants, e-commerce platforms, or distributor networks requires effective inventory and logistics planning.
• Maintaining compliance: Businesses need to keep applicable licenses, labels, testing records, and other required documents updated.
• Handling quality issues: Spoilage, contamination, or changes in product quality need to be investigated promptly, with appropriate corrective action and traceability records.