Over the last decade, our team has helped launch and market wine and spirits brands, along with other alcohol beverages.
From Burgundies to sherries, gins and cream liqueurs, to cocktail mixers, many of these products have been hand crafted, thoughtfully produced, beautifully packaged, and had a heritage or history behind their brand story. Most, however, needed some assistance, in one form or another, primarily reaching buyers.
Below, we will identify a few of the questions every wine, spirits, and alcohol beverage entrepreneur should consider when planning to bring a product to market in the US.
Getting Your Wine and Spirits Brand Ready To Sell in the US
Before a brand is legally allowed to sell, registration is required for each product, vintage, and container size you plan to market. The organization in charge of Federal label registrations is the TTB. This is a requirement, regardless of whether the product is made in the US, or is being imported from another country.
The TTB requires documentation including, but not limited to, what the product is (identified by select categories), what it is made of, where it is made, the age, if applicable, percentage of alcohol, and a unique product SKU (or barcode) for the ability to quickly identify the contents of the bottle/boxes when it passes through various inventory checks.
In the United States, only certain bottle sizes and quantities will be approved by the TTB.
As of the date of this article, the US standard sizes for wine are as follows:
- 50 mL
- 100 mL
- 187 mL
- 375 mL
- 500 mL
- 750 mL
- 1 L
- 5 L
- 3 L
Distilled spirits standard sizes are as follows:
- 50 mL
- 100 mL
- 200 mL
- 375 mL
- 750 mL
- 1 L
- 75 L
Cans with standard sizes of 50 mL, 100 mL, 200 mL, and 355 mL are also acceptable for submission to the TTB.
Along with documentation and standardized net contents, all bottle labels must go through the approval process as well due to restrictions on font sizing, visibility of certain content, and placement of specific verbiage.
This is an area where import products can become complex, as bottles frequently have to be remanufactured and labeled, to meet the TTB’s requirements for market entry. If your brand is repackaging for the US, be sure to work with a team that understands the complexities of wine, beer, spirits label design, and can guide you through the process.
More Regulations: Alcohol Social Media Content = Advertising
If you own an alcohol beverage brand, Federal regulations also require compliance with guidelines and restrictions on how you market and advertise your products.
Tied House Laws not only apply to in store promotions, radio, television, and print advertisements, but also to brand generated social media content. What does that mean for a wine, beer, or spirit brand?
In short, two things. One, every Facebook post, tweet, Instagram story, or Snapchat video is considered advertising. This means the same regulations for content on a billboard would apply here, as well. Two, responses to consumer inquiries on social media platforms are viewed under the same guidelines. Violations of Tied House Laws are punishable by fines, potentially costing thousands of dollars.
Although an experienced, knowledgeable marketer can legally work within these guidelines, hiring just anyone, whether it’s a PR firm, an ad agency, or your cousin to run your vodka brand’s social media can not only be unwise, it can be expensive, if they make a mistake.
FK Tip #1:
Any/all Facebook posts, Tweets, Instagram shots published on the brand page count as an advertisement, and Tied House Laws apply. Only hire experienced persons to represent your brand on social media, and be smart about what you post, no matter where that content will live.
How To Work With US Importers & Distributors
Once your bottle and label have been approved, the next step is to identify the right distribution partner to get your product to retailers. How bad could this be?
For many entrepreneurs, this is where the confusion and misunderstanding begins to set in, as there are things that a distributor does-and does not-do, especially for emerging brands.
Over the years, we have heard many entrepreneurs make statements like, “I have emailed hundreds of distributors, but no one has responded. What do I have to do to get them to pick up my brand?”
Even new brands that obtain a distributor can have challenges. It is common to also hear from brand owners that their importer or distributor is ‘not marketing’ the product, or has picked it up, and is now sitting on the inventory.
In the wine and spirits industry, one of the biggest misconceptions regarding the supplier to distributor relationship is that once you get a distributor to carry your product, all of your work is done.
Unfortunately, this is not the case in the US market. A brand owner cannot simply keep making alcohol, ensuring the supply never runs out, and hope the distributor does the rest of the work. To help clarify both the role of a Producer, and a Distributor, you must understand what a distributor’s job truly encompasses.
What Is The Role Of An Alcohol Distributor in the United States?
Distributors of alcoholic beverages are licensed and bonded to transport alcohol from their warehouses to various retailers, within their assigned territories. This is based on the three tier system put in place during the days of Prohibition.
Each route has both an account representative, or commissioned salespersons, as well as drivers designated to fulfill orders. These orders are either solicited by the distributor’s salespersons, a local brand representative or placed by the on or off-premise retail buyers.
When the inventory of a specific item is running low, and they choose to place a reorder, a retail buyer will notify the distributor that they need to purchase a shipment of product. In the US, orders are fulfilled based on either six or twelve bottle cases.
Distributors collect data based on the purchasing requests of their retailers and stock their warehouses accordingly. Products that sell the most are the products that receive higher priority.
Why (Most) Distributors Will Not Pick Up a New Product
If a brand is new or is new to the United States market, it is usually best to initiate the importing and initial distribution process in a home market (your home state, and/or a nearby key home market with port cities, like New York, Florida, California, etc), then seek out a distributor that will physically sell the product. Brands that do not have consumer and retailer demand are not of interest to most distributors because they consider new products to be an inventory risk (and therefore, not a wise investment).
Margins are also critical to consider, especially for imported products. If the cost of your product line or brand is substantially higher than competitors on the shelf, you will not be a good fit for a distributor. Why? Because it’s going to be a hard sell, both from a wholesale perspective, as well as for the retailer. For more information on how to work with wine and spirits distributors and retailers, please see this article.
FK Tip #2:
It can be helpful to provide a bonus or sales incentive program for distributors and buyers. This can encourage them to work with your brand.
Alcohol distributors are not in the business of selling inventory that a retail buyer does not want. Retailers also prefer to buy products that their customers want to purchase.
For a commissioned salesperson, it is potentially easier for a representative to sell a brand like Grey Goose, verse XYZ Vodka. Logically speaking, the more popular the brand, the easier it is to sell.
Does this mean that a distributor will only carry a brand that retail buyers are asking for? To most unknown brands, the hard answer is yes. Either educate the buyer, and start making noise, or pay your way into the game.
So how do you get a retailer to ask a distributor for a brand if you can’t sell directly to them?
Sales vs. Marketing…Which Comes First?
When establishing a brand in a new market, driving both demand and sales can appear to be a ‘chicken vs. egg’ scenario. If people don’t know about your product, they won’t ask for it. It is because of this reason, retailers will not buy it, and distributors won’t pick it up.
Some brand owners may feel that it doesn’t make sense to start marketing something that consumers can’t yet buy. Smart brands like Grey Goose, Tito’s Vodka, Rumchata, and Fireball Whiskey, however, succeeded because they started telling a story before the brand was on the shelves. Each brand was built around a consumer lifestyle, with stories and content that resonated with them.
Even without product at retail, startup brands still have access to other opportunities. Participation in industry events, awards, tastings, and trade-shows are abundant. It is crucial to look for options to creating noise and building brand equity that will open doors.
Be relatable, be useful, strategic, and consumers will take notice of your brand.
At the end of the day, distributors and retailers want to know that your brand will sell. The recipe for a successful is to prove that your brand can do more than just take up shelf space.
Getting buyers to understand: What your brand is, why was it made, what they can do with it, and where they can try it are all crucial to achieving brand success.