How to choose the right distributor for your alcohol beverage brand.
Though the popularity (and legality) of direct to consumer sales is growing, the “bread and butter” sales channel for alcohol beverages is the 3-Tier system. Finding the right distributor for you is crucial to your brand’s success. Distributors come in all shapes and sizes but here are the 3 of the most common:
Top Supplier Distributor
These distributors often have a leading market share in particular state or region and are usually part of a larger, multi-state network. These distributors portfolio usually include the top 10 spirits and wine suppliers and utilize a divisional sales set up with multiple sales people calling on the same account. You’ll want to approach these distributors first, but be careful to manage your expectations, as they typically won’t take on a new brand without a proven track record of markets success and there’s always the real concern that your brand won’t get as much attention as the big brands.
Second Tier Distributor
If you can’t get a Top Supplier Distributor to represent you at first pass, usually a second tier distributor is an excellent choice for your brand’s launch. These distributors typically command a smaller market share that focuses on metro areas and represent small to medium size producers – none of the top 10. Due to their size, they typically can offer more focus on your brand, but often can’t offer the customer service that the Top Supplier Distributors have and may present a greater credit risk.
Clearing Distributors
Clearing distributors don’t provide an active sales force in the market but they do manage clearing and product logistics. Clearing distributors represent both small and top 10 producers, usually in the capacity of a special projects or test markets. They typically charge a small per case fee as opposed to a large gross profit.
No matter which distribution route you choose, remember that you as the producer need to play an active role in the sales process. You have to be the face to your brand, while your distributor is taking orders and handling logistics. Ride-alongs and strong in-market support of your brand by your team is crucial.
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I have a cocktail concept and am interested in entering market….your information is extremely helpful, thanks. I want to hear more…
Thanks La Verne! Glad you are finding the content helpful. Let me know if you ever want to collaborate on your cocktail project.