This is the question I get asked most often by brands who are looking to enter the massive United States alcohol beverage market. We’re going to approach things more from the perspective of the spirits and wine brand, but this is largely true for beer brands as well.
Will you have an Importer or a Plant?
First things first: In the U.S., you have to have either an importer for foreign products or a production site (like a distilled spirits plant) for a domestic product. If you don’t have either of those things, no distributor can buy from you.
You can learn more about that here, but (shameless plug), this is where you need to have a company like Helmsman Imports, which handles all of this for you. The other option is to negotiate with a full importer which already has existing relationships with distributors. As they say, alcohol is a people business, and that means a lot in deciding whether they’ll take you on.
The Four Types of Spirits Distributors in the US
Each state you go to has to have a separate distributor (or, in a control state, a broker that helps navigate the state). An easy way to think about distributors is that they are four types:
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Rent-a-Distributor: There are companies that exist that have a distribution license and use friendly trucking companies. Examples of this are Fleetwood Trucking used by Helmsman in New York, services like Libdib that are paid by transaction, or competitors to Helmsman like MHW and Park Street that have their own distribution licenses. In this situation you keep the distribution margin but you take credit risk. So if the restaurant doesn’t pay, you are out of luck.
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Mom and Pop. This is someone with a distribution license and some trucks that might not cover the whole state. Often these are young distribution companies that might not have been around long but are looking for good brands.
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Mid-Sized. These are often distributors in one category looking to supply to another (e.g. a wine distributor that wants to sell some craft spirits, or a beer distributor that wants to do the same). They frequently have more hand-sell focused sales teams, cover most independent accounts, and can have good relationships with larger chains. The downside is they don’t always have true omni-channel ability to sell into.
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The Majors (aka the Big Dogs). This includes the big guys like Southern, Breakthru and RNDC. They will have many thousands of brands, will cover almost all accounts in a state, and have omni-channel sales forces that cover pretty much everything: military bases, stadiums, chain liquor stores, big grocery stores, even convenience stores (or C-stores as they are called).
On-Trade vs. Off-Trade Spirits Strategy?
Think about what kind of brand you are. Will you build your brand equity in the independent on-trade based on quality or are you going for the value offering in large grocery stores in the off-trade? Of course everyone wants to be everywhere, but where you think your brand or portfolio will live will depend on how you make a decision. For instance, a classic growth strategy is to start with mid-sized distributors and only move to large distributors if you need to be in large retailers like Whole Foods.
How to Find Distributors in the US
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Cold Outreach. This is a strategy that sometimes works (but more rarely). It’s sometimes hard to know where to start, so if you’re a Helmsman client, reach out to your brand manager so we can help you understand the landscape.
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Networking. Your best way is often networking with other friends in the industry. It’s a people business and brands are often chosen on whether the distributor manager or owner likes you and likes your product
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Festivals and Trade Shows. Industry festivals and trade shows like WSWA or BCB or even Tales of the Cocktail can be a very useful way to meet distributors.
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Buyers. This is the absolutely best way to get into a distributor – if the buyer for one of their big clients wants you, this will help you get in the door.
You’ve attracted a US distributor, now what?
Ok, you have someone on the hook. First, distributors don’t move fast, so be patient. Second, you’ll need to set up product (reach out to the Helmsman brand manager as we have other modules that help you do setup more easily)
Sometimes, a distributor will just buy product. Other times, they will ask for a contract (if you need assistance, reach out to inquiries@helmsmanimports.com and we’ll see if we can refer you to someone who can help figure it all out.
Finally, once you have things going, you have to execute – now the fun begins…
Part 2 Coming Soon!
