New founders in beverage tend to treat price as the last decision — something you back into after the formula, the can, and the logo are done. I’ve run Beverage USA Holdings and co-founded NERD Focus long enough to believe the opposite. The number printed on the can is one of the loudest things your brand says about itself. I’m Howard Davner, and pricing is the part of this business I see people get wrong most often, so it’s worth being precise about.
Price is a position, not a calculation
The instinct is to add up your costs, tack on a margin, and call it a price. That gets the arithmetic right and the strategy backwards. In functional beverages, the price sets the shopper’s expectation before they’ve tasted anything. Sit a dollar under the category leader and you’ve told people you’re the cheaper alternative — a hard place to build loyalty. Sit at parity or slightly above and you’ve made a claim you now have to back up in the can. Both are legitimate. What isn’t legitimate is picking a price without deciding which claim you’re making.
The margin stack is unforgiving
Here is the reality that surprises people. The price a shopper pays is not the price you collect. Between your dock and that cooler sits a distributor who needs a margin and a retailer who needs a bigger one. By the time everyone is paid, the revenue that comes back to you can be less than half the shelf price. If you set the retail number first and work backward, you often discover there’s no room left to actually make the product well. So I work the stack in both directions: what the shelf can bear, and what I need to clear after everyone takes their cut, and I only move forward when those two numbers can coexist. If they can’t, the problem is the cost structure, not the price.
Anchor on the serving, not the pack
Shoppers don’t compare spreadsheets; they compare feelings of value in about three seconds. The most useful anchor in a functional category is price per serving against what the drink does. A focus drink that genuinely delivers steady energy for a few dollars is competing with a coffee-and-a-pastry habit, not with the cheapest soda on the shelf. When you understand the comparison the customer is actually making, a price that looked expensive in isolation can look entirely reasonable in context. Getting that framing right is worth more than shaving a quarter off the tag.
Discounting is the easy mistake
When sales are slow, the fastest lever within reach is a price cut, and it almost always feels like progress. It rarely is. A deep discount trains your best customers to wait for the next one and quietly resets what the brand is worth in their minds. I’d rather move volume through trial, sampling, and distribution than through a permanently lower price, because a discount you can’t walk back isn’t a promotion — it’s a repricing. Protecting the number is usually the disciplined choice, even when holding it is uncomfortable.
What I’d tell a founder
Decide what your price is saying before you decide what it is. Build the margin stack honestly, from both ends, and walk away if the math only works on a spreadsheet. Anchor customers on the value of a serving, not the cost of a case. And treat every discount as a statement about your brand, because that’s exactly how the shelf reads it. Price isn’t the afterthought in this business. For Howard Davner, it’s one of the first real decisions a beverage brand ever makes.
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