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zachj9292
05-22-2012, 05:02 PM
Would you guys recommend visiting a distributor with your product before you even have the business plan finished. I called to get information on how much they would mark up the price on my kegs (how much money they would make out of one) and the guy said this was confidential and that I should schedule an appointment and bring my beer.

I just finished the rest of the particular recipes I want to sell and it will be another month before I have any.

What did you guys do to get this info?

zachj9292
05-24-2012, 11:28 AM
anybody??????????????????????

fa50driver
05-24-2012, 12:14 PM
Distributors wouldn't even give us the time of day until we were an established brewery. They basically started to take notice of us once we were taking over their tap lines. Until that point, they wouldn't give us any information on pricing.

You may have better luck........

pjbroyles
05-24-2012, 01:52 PM
Same here. Very confrontational, condescending and snobbish until we took a bunch of handles from them. I waited for them to come knocking.

admin
05-24-2012, 03:36 PM
What did you guys do to get this info?

It's all here in the Discussion Boards....

Most distributors are not going to meet with you until you have a business plan, a marketing plan, pricing, pricing/promotion strategy, product, POS samples and a good answer to the question; "why is anyone going to buy your product over the hundreds of other craft brands on the shelf."

HOBWI
05-24-2012, 08:30 PM
I hear average is 30% of sale price....for biz plan pourposes. In the beginning they might provide "market support"= money back per keg plus $ for tap handles, advertiding etc.

I'd wait until like the others said...and what I did...you start taking draft lines, you'll be in a much better bargaining position. I think in most States distribution agreements fall under franchise law meaning you have to buy or be bought out if you want to terminate, so be careful.

callmetim
05-25-2012, 08:05 AM
30%-40% depending on what you want them to do as far as marketing and other services. We talked to 3 and decided with our low volume there just wasn't the room to pay the distributor. I actually found the ones I spoke with to be pretty open and friendly.

Brewtopian
05-30-2012, 08:53 PM
A couple new breweries here in our area have done a really nice job with their distribution plans. They self distribute here locally but engaged a distributor to get kegs to outlying areas about 3 hours out. They didn't do this from the start, they waited until they had enough capacity and cooperage and were established locally.

Until you have beer in local bars and restaurants you're wasting time and getting way ahead of yourself talking to distributors.

roc-craven
06-08-2012, 11:19 AM
Until you have beer in local bars and restaurants you're wasting time and getting way ahead of yourself talking to distributors.

Remember not all states let you self distribute. Breweries in Florida must rely on distributors to get their beer to the bar next door.

Brewtopian
06-08-2012, 05:38 PM
Remember not all states let you self distribute. Breweries in Florida must rely on distributors to get their beer to the bar next door.

Good point. Its easy to forget that not every state supports craft beer and permits self distribution. I'd never really considered how a state that doesn't allow self distribution could have distributors that choke off available supplies of locally produced beer by refusing to carry it. Sounds like a good thing to get on a ballot initiative.

thatjonguy
06-08-2012, 08:48 PM
Has anyone ever seen or used a family or friend to distribute their beer? Since most states that ban self-distribution also ban any financial interest by brewery/wholesaler.

Say if your friend starts a distribition company to sell your beer, all they really need is an office or large storage unit with a cooler and a van. Plus all the licenses to go with it.

Just a thought for the sake of discussion.

Brewtopian
06-08-2012, 09:51 PM
I think that sounds easier than it really is. The one key element that you forget is the money to secure the space, maintain a warehouse, service accounts, build a large cooler and have a sales force to sell the product.

The other key thing you're forgetting is in todays beer culture there is no distributor that can survive with just one brand. Unless your brand already controls a sizable portion of the local market you would be damning your friend to failure both personal and financial and ultimately damaging yourself and your business in the process.

einhorn
06-08-2012, 10:16 PM
^^^ true story.

thatjonguy
06-09-2012, 07:33 PM
^^^ true story.

I totally agree, but thought I would throw it out there for discussion.

Luckily for me, I have distributors wanting to talk before we have even secured our building. :D

redlodge.sam
06-12-2012, 05:36 PM
Jon,

While it might not be a viable business, having a friend or family member own a distro license to help you out might make a lot of sense. I have owned a brewery for 14 years and self-distribute in an hour radius. I can tell you, no wholesaler will sell your brand like you do, they have too many other committments/brands.

I own a wholelsaler's license in neighboring wyoming so I can self distribute there. All that is required is that I maintain a warehouse and pay my taxes and license fees. Wyoming statute does not speak to who delivers the beer or in what vehicle. I rent a mini-storage for $60/month that contains nothing but a wyoming wholesaler's license certificate on the wall and deliver direct from the brewery in Montana. I do not hide this from the Wyo liqour licensing and they have no problem with it as I follow the letter of the law.

My mother owns a beer and wine license at a premises adjacent to the brewery so that we can circumvent Montana's restrictive retailing laws. I am allowed to be an employee of the retail establishment and run the operations there. We invoice all beer from the brewery to the retail establishment and the retail pays the bills according to montana statute.

There are many creative ways to circumvent the three tier system. Remember, you only need to follow the letter of the law, not the spirit. Just be certain you are following the law. If you are not sure, hire a liquor lawyer in your state to advise you.

You can pm me if you have any questions regarding the issue.

cheers,
sam

JSHops
06-14-2012, 10:57 AM
I would like to do somthing like this in Wisconsin, but work with only 5 to 10 Craft Brewers at a time so I can really focus on their brands. I could be a contract employee of the brewery and therefore be able to deliver if needed.

mr.jay
06-19-2012, 08:05 AM
You are looking at distributor taking around 30% margin (not mark-up) for your beer, maybe more.

Some distributors will co-op tap handles and POS materials with you, some wont. Some distributors will sell the dickens out of your brand, most will bury you deep in their portfolio.

Plan on meeting with distributors' sales reps regularly to keep them up to snuff about your brand. Plan on getting frustrated with them. Plan on them getting frustrated with you (especially if you are going into this with little or no experience).

If you don't have any professional experience, you have a tall hill to climb.
I began my first brand after working 8 years in a brewery, and establishing relationships with distributors. Until I got over 20 accounts, I never even formally met with them in the office. A conversation and a handshake was enough. I used that distributor, because another brewer told me horror stories about the one I had originally chosen. This saved me OODLES of time and trouble (since it is incredibly difficult to change distributors in my state in a timely fashion). If you have been working in this industry for even a few years, and can speak their language, know some of the ins and outs, they will take you more seriously from the get-go. Remember, in today's saturated market, they are being bombarded with folks like us looking to get exposure. You are not doing them a favor (yet) by asking them to distribute your beer. It's the other way around. Get your plan together, and build a 35% margin into your cost. That should get you a good start....then approach the distributor. And if you aren't already, go work for a brewery. Even if you have to start part time.

World Class Bev
06-20-2012, 07:00 AM
Just a couple of my thoughts on meeting with a distributor (I work for an Indiana distributor) -

First, I'd suggest meeting with one sooner rather than later for a couple of reasons. One, if you are self distributing you might want to get your practices in line with the way a potential distributor might work in your market in order to avoid a lot of pain later when (or if) you transition to one. Second, as long as a distributor is willing to talk to you I think its great to start learning about potential partners and building a relationship early on. For those distributors that don't want to talk to you, too bad for them.

Second, while a good distributor probably wants to see a lot of info from you before considering taking on your brand, they might also be helpful at times in helping to formulate your business plan. If your in a market that allows for self distribution, for example, the eventual buy-out of your territory by a distributor could be a big piece for you as a brewer. Also, you might be able to get a better grip on your market and pricing if a distributor is willing to sit down with you.

Last thought - many distributors are eager to carry local brands these days, but there are a lot of brands out there now and distributors do worry about how they can be successful with a much larger number of brands than they are used to. In the long term, you'll need to get some "share of mind" from the salespeople within a distributor in order to be successful going with them and I think that starting a relationship early on with a distributor is a good way to start that process. Getting to know them and their people is also a great way for you to learn about them. You could decide that the are not a good potential partner, or that they are better than you thought.

dplittle
06-21-2012, 02:04 PM
I used that distributor, because another brewer told me horror stories about the one I had originally chosen.

As you begin to evaluate and select your distribution partners, don't forget to interview the marketplace and a distributor's other breweries. Make an independent list of the places in the territory in which you'd like to see your beers being sold ... bars, restaurants, off premise, etc. Go to the owners of these establishments and see which distributors they recommend. Which ones know their brands, introduce new items, help with pairings, etc.

And no one can better tell you how a distributor works with a partner than some of their partners! Who are the other local brewers using? Who are the big regional guys using. Which distributor pays their bills on time? Which one doesn't? It then soon becomes easy separating the "barley from the chaff."

David