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When is the right time to start conversations with distributor - new brewery

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  • When is the right time to start conversations with distributor - new brewery

    Hoping someone on either side (brewery or distributor) can answer a few questions for a new brewery. We are about 6 months from opening and still on the self distribution fence. If we assume that we go the distribution route (NJ), when do we start calling distributors?
    We have a few that have reached out to us, but want to make sure we look at all options. We plan to have plenty lots of marketing materials (sell sheets, POS, etc)

    What are some of the important questions we should be asking once at the table?
    -coverage of state
    -number of reps
    -% terms
    -industry experience
    What else?

    Any help greatly appreciated! Either on forum or PM me.
    Thanks
    John

  • #2
    I think we did the right thing and had each distributor come by the brewery to talk and listened to their sales pitch. Over the next few days we called and visited a handful of bars/restaurants, retail stores, and other breweries that were using the distributors and asked for their opinion on the service provided by each distributor. It wasn't clear cut, but after taking everything into consideration it was a pretty clear choice. It also gave us the opportunity to go back to the distributor with suggestions and requirements on how we could work together to better their sales team in the areas where there was concern by the retailers.

    Will
    Chaos Mountain Brewing

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    • #3
      great advice from Will, a very important feature about a distributor is the relationship they maintain with the bars they sell too.
      I would call around and ask for some opinions. Our choice was easy because the distributor we chose was smaller than a lot of the other big guys in town, and all they do is craft beer. Every bar loves the service they get from our distributor, and some bars give them extra taps because of the awesome selection they can get. This all benefits us too.

      As far as starting a conversation, i would start that at least a couple months before you plan to have beer coming out the door. It might even help to chat with some of the distributors even before you decide about whether you want to self dist. Then you can discuss some price points with them, it might help the decision making process.

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      • #4
        Thx

        Sounds like a few months prior is timing to have a contract set. Having the distributors in is a good idea. We are focused on a few but do want to hear from them all (if mutually interested).

        Thanks for the replies. Open to any other insights from experiences

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        • #5
          You may want to consider what their co-op policy is on tap handles, post off, old product in the market, wearables, sales incentives etc. You need to know their in house policy for working with their reps. Distribs generally don't like you removing one of their brands on tap, consult with their rep if they are about to lose one (draft account) and you want it. You likely don't need to drop your shorts on price just because you think it will bring good will, 32% is about right for them. Will they let you accompany on chain calls (or will they accompany you.) Consider what other brands they have in house. Sometimes it's better to be in a distrib that doesn't have your main competition. Call frequency is important. Who does the best job merchandising the supers if you have package.

          As iv'e said in other posts, being your own distributor is like running a separate business. Depends on how many accounts you need. If you can live on 50 or less, maybe you do it yourself. If you tell me who the 2 or 3 choices are in your market I can help you evaluate. I can pretty much tell who is good by what brands they have.

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          • #6
            As some others have said, going out and asking the local retailers in your area will prove extremely valuable. The opinions of the retailers will be honest and the information will give you tons of insight in to making the right choice.

            Some things to consider:

            How many "craft" brands are they already representing and what "share" of their portfolio do you expect to get. ie are you a top five brand for them or a bottom feeder?

            How much money are they going to put in to marketing the brand? If you go the self distribution route you stand to get more investment dollars if you've already created a local demand for your product. Most distributors wont pay a dime for a brand if its new and unproven in the marketplace.

            What is your potential local market share? How many distribution points do you attempt to gain and at what accounts do you intend on placing your product. Can you keep up with that demand on the production side? Can you afford to have capital tied up in cooperage for at minimum two months? It could take that long or even longer for your kegs to be returned for refilling.

            The right time to start talking about these things is NOW. Distributors will court you and tell you they will go to the moon for you only to find out after the contract is in writing they could care less. Do your homework, expect the worst and always, always protect yourself and your product.

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