NAVIGATING LEGAL CHALLENGES IN COMMERCIALISING NEW PRODUCTS
Commercialising new products is an exhilarating endeavour for businesses, offering opportunities for growth, innovation and market expansion. However, amid the excitement, numerous legal considerations loom large. From intellectual property (IP) protection to regulatory compliance, navigating the legal landscape is crucial for the success and sustainability of any new product launch. While the focus here will be on the commercialisation of an alcoholic beverage in the US, the lessons and takeaways would likely apply to any product or industry.
Company structure
If the alcoholic beverage is the company’s first ever product, the company has great latitude in structuring itself. However, if this is not the company’s first product, then there are strategic considerations that would strongly encourage the creation of a new, standalone corporate entity. Because alcoholic products comprise a category subject to some of the most comprehensive regulations, it would simplify the regulatory burdens by having only alcoholic products made and sold through that newly created entity.
Manufacturing
The company needs to decide if it would make the most fiscal sense to invest in the infrastructure and labour costs that would be associated with manufacturing the alcoholic beverage in-house, versus entering a contractual arrangement with a third-party manufacturer. If the company has already been manufacturing non-alcoholic beverages, and the alcoholic product would be placed in the same type of containers and the manufacturing process would be similar to the process for non-alcoholic products, in-house manufacturing may be worthwhile from the outset. If not, the company may be better served relying on the third-party manufacturer, at least until sales of the alcoholic beverage reach a critical mass that would justify the capital expenditure on in-house manufacturing.
Jul-Sep 2024 Issue
Bryn Law Group