BusinessHABManhattan beer distribution: Beer distribution might seem like a simple process of taking signed contracts, crates of beer and a truck to a wholesaler or brewery and coming back with an order. But it’s actually much more than that. When you are new to the business, it may be difficult for you to understand the nuances involved in effective beer distribution services. However, there are several best practices that will help you achieve greater results and fast track your growth as a distributor.
But what exactly is beer distribution? It is selling beer on behalf of breweries or suppliers to retailers who in turn sell it to their customers. It is one of the primary ways breweries can get their products out into the market. While some distributors are small businesses that focus on regional markets, there are many large organizations that work directly with breweries and wholesalers. There are also independent distributors (ID) who act as intermediaries between suppliers and wholesalers, acting as exclusive handlers without having their own warehouses or manufacturing facilities.
6 Best Practices for Successful Beer Distribution
The beer industry is always changing, and adapting to new trends and business models is essential for staying relevant. The craft beer movement has led to a surge in demand for unique, local products that cannot be found on grocery store shelves. That’s why more breweries are contracting with wholesalers to bring their beer directly to bars and retailers. But this type of beer distribution poses unique challenges that manufacturers must meet head-on if they want their brand to succeed. In this blog post, we’ll discuss the benefits of contracting with a wholesaler, the best practices for contracting with one yourself, and everything you need to know about contracting services as an independent manufacturer.
What is beer distribution?
Distribution is the practice of selling beer to retailers. This includes all activities related to getting the beer from the manufacturer to the retailer, such as warehousing, product delivery, and sales support. The distributor is responsible for sourcing, storing, and delivering beer to retailers. They also deal with any issues related to the product, such as returns, correct placement, and inventory management. Distributors can sell wholesale on a franchise model or on a non-franchise model. Distributors that sell on a franchise model are required to have the authority to sell a certain amount of beer in their territory. Bellying up with a franchise distributor means meeting their minimum sales requirements, while non-franchise distributors are free to work with any company they choose.
Why contract with a wholesaler?
One of the biggest benefits of contracting with a wholesaler is that they are experts in the industry. They know what accounts to target and how to get your product onto store shelves. On the other hand, as an independent manufacturer, you may not have the personnel to effectively market and distribute your beer. Furthermore, hiring a sales representative for each account is both costly and inefficient. By contracting with a wholesaler, you are outsourcing the legwork of beer distribution. This frees up your team to focus on the aspects of the business that require their attention, like manufacturing and marketing. The wholesaler will take care of everything from determining which retailers to target to managing the product on the shelves so you can rest assured your beer is getting the attention it deserves.
Stay in-stock and on brand
During the contracting process, be sure to discuss your brand promise with the wholesaler. They will use this knowledge to help you stay in-stock at all times, while also following their sales plan. By staying in-stock, you will reduce the number of product recalls related to sanitation or mislabelling. The wholesaler will also help you stay on brand by placing your beer according to its specifications. For example, if your beer contains a higher alcohol content or has other special requirements, the wholesaler will place it in appropriate inventory.
Advertising and marketing
Even if you choose to contract with a non-franchise wholesaler, you may be required to budget a small amount of money for marketing. This money can be used to pay for events, social media advertising, or anything else that will help spread the word about your product. If you elect to contract with a franchise distributor, you may be required to budget for TV and radio ads. This is because franchise distributors are obligated to put a certain percentage of their revenue into marketing their brands. Although the wholesaler may be resistant to this, you should push for a budget that allows you to reach customers at the point of sale. Although you may not be able to reach the same scale as major beer brands, you will have the opportunity to build a loyal customer base that will purchase your product again and again.
Protect your profit margin
When negotiating your contract with the wholesaler, be sure to protect your profit margin. When you are deciding on pricing, remember to account for everything, including freight, taxes, and other expenses related to getting the beer to the retailer. If you do not protect your profit margin, you may not have enough money left over to fund the next round of production. This is a lose-lose situation that could result in your product being removed from the shelves. There are several ways to protect your margin, including setting a minimum sales requirement, negotiating a discount off of the suggested retail price, or establishing a formula for profit. By setting a minimum sales requirement, you are ensuring that the wholesaler will do their part to help you make a profit. This can be especially important if you work with a franchise distributor because these companies use a commission-based model.
Wrapping up
The beer industry is always changing, and adapting to new trends and business models is essential for staying relevant. The craft beer movement has led to a surge in demand for unique, local products that cannot be found on grocery store shelves. That’s why more breweries are contracting with wholesalers to bring their beer directly to bars and retailers. But this type of beer distribution poses unique challenges that manufacturers must meet head-on if they want their brand to succeed. In this blog post, we’ll discuss the benefits of contracting with a wholesaler, the best practices for contracting with one yourself, and everything you need to know about contracting services as an independent manufacturer.
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