Why do beverage manufacturers have minimum order quantities?

Many large scale beverage manufacturers have minimum order quantities based on litres produced or units packaged. Many believe that minimum order quantities exist to cover costs and allow for profit for the manufacturer. While this may be true, there are many supplier and machine factors that affect minimum order quantities.

Viability of packaging run

On larger, industrial sized packaging lines, completing small packaging runs might not be an economical decision for a business. We make this decision based on the time needed to set up the machine for various pack sizes. Setting up the machine may involve changing parts. Depending on the machinery, this can be a lengthy process, or require a number of staff members to complete.

If you need to package different products in a specific order, you may need to do extra cleaning. This will take up more time and labour. These factors combined contribute to decisions around the size of the run needed to complete a packaging run.

Machine requirements

Some beverage manufacturing packing equipment requires a minimum amount of litres to commence operation. Certain equipment requires a specific amount of liquid to operate. This includes filling a filler or carbonator with a set number of litres. This may be as little as 5,000L or significantly more.

A number of beverage packaging machines are in operation across Australia with varying requirements. Running out of fuel can cause problems like oxygen getting into the packaging during production.

Supplier minimum order quantities

Whilst beverage manufacturers have minimum order quantities, so do the suppliers they utilise to source raw packaging materials. This includes raw ingredients (flavours and additives), cardboard cartons, labels, cardboard wraps, printed cans etc.

With many dry good suppliers, the smaller the run the more expensive the dry goods become. This stops new companies from entering the market because they can't make small amounts of product to sell. This is a problem for brands creating new products. They might purchase too many dry goods without knowing how many units retailers will order.

Here at IDL our minimum order quantity is typically 20,000 litres of a single product variety for both bottling and canning, and 200 keg units for kegging. Contact our team today to learn more.

Read also;
Methods of Transport for Beverage Products,
Three Different Types of Alcohol Taxes