With hundreds of distribution companies to choose from, how can you determine which is the best fit for your emerging liquor company? This comprehensive checklist is designed to help decision makers at startup alcohol companies choose the best liquor distribution company to partner with.
Brands first need to research laws surrounding the sale of alcoholic beverages in the state(s) where they’re trying to distribute. Second, producers can begin to identify individual companies they want to work with. Finally, suppliers need to devise a plan for how they will communicate their value proposition to distribution companies.
State Specifications
- Identify whether or not you will be selling within a control state.
- For companies selling their products in control states: contact the local Alcohol Beverage Commission or other relevant organization to verify the necessary course of action. You can find their contact information here.
- Consult state-specific franchise laws which regulate the relationships between producers and distributors.
- Beer producers can refer to this database of franchise laws.
- Spirits producers can find information on how to obtain a copy of Distilled Spirits Council Summary of State Laws & Regulations Relating to Distilled Spirits here.
The Search Process
- Before determining specific companies you’d like to work with, outline the criteria that your choice companies must meet.
- Consider the distributor’s commitment to the success of emerging brands in their portfolio.
- Verify the company’s proficiency in executing field marketing strategies.
- Discover how much regular contact the distribution company keeps with its clients.
- Check the company’s quality standards to make sure they align with your brand’s own standards.
- Make sure the distributor's merchandising portfolio is competitive against the market.
- Consider the distributor’s payment structure. Will they ask for payment by objective, or performance?
- Inquire about their reporting process. Will they report on your brand’s performance?
- Compile a list of individual distribution companies.
- Try a simple search query. Use terms that pertain to the type of alcohol you sell and the geographic location where you will distribute.
- Leverage trade associations such as the Wine and Spirits Wholesalers of America or the Beverage Trade Network.
- Get first-hand recommendations from liquor stores, bars, and restaurants.
- Contact your selected distribution companies.
- Where required, fill out an application. If you can’t find the necessary forms on the company’s website, give their company headquarters a call.
- If an application is not required, either make a phone call or send an email to a decision-maker at the distribution company.
- Provide a concise description of your product and an explanation of how it fulfills a niche market that the distribution company does not yet serve.
Separating Your Brand
- Create a sales pitch that you will make to those companies that ex
- Pricing flexibility to ensure margins that are favorable to the distributor
- Your ability to provide sampling and point-of-sale marketing materials
- Your ability to operate with payment terms that alleviate any cash flow pressures for the distributor
- Your capability to deliver your products to their warehouse
- Any quality ratings or positive reviews of your products
- Your aptitude in meeting present and future inventory demands
- Your standout packaging as a sales mechanism
- The thickness and labeling of your “trade packaging” (i.e. outer cartons and inserts)
- Verbal or written agreement from retailers to sell your products
- Your willingness to educate distribution sales reps about your products and collaborate with them on promotional activities
