Meeting w/ a distributor

[zachj9292]

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]

anybody??????????????????????

[fa50driver]

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]

Same here. Very confrontational, condescending and snobbish until we took a bunch of handles from them. I waited for them to come knocking.

[admin]

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]

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]

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]

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]

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]

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]

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]

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]

^^^ true story.

[thatjonguy]

^^^ 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.

[redlodge.sam]

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