Such an ominous beginning to my article. I know, Rosen, you are negative, or Rosen, you are pessimistic. The truth is, I am neither. What I am, however, is realistic, and I have enough grey hair and enough years under my belt to have seen much of “it all.” I have no skin in this game. I do not own a brand, and I do not own an importer or distributor. Without those shackles I am free to tell the truth as I see it and share what 40+ years of experience has taught me. With that being said. Your brand will fail.
Looking at the mathematics of it all is the easiest way to tell this narrative. There are basically 2 or 3 nationally positioned distributors. There are nearly 50,000 brands registered with the TTB from all over the globe. There are roughly 400 brands that are considered “must haves” by the retailer. There are 400,000 liquor license accounts in America (some are beer/ wine only) and there is a new brand seeking a drinker daily. That is simple math. Like 3rd grade math.
Yet, there are more suppliers that want to jump into the game than ever before. I will not, nor will our firm ever discourage anyone to entering the space. What we will do is train, teach, show the maker how to navigate these odds. These are the odds, and if you don’t accept them, then you will literally be distilling, fermenting, and brewing your money away. This is an entrepreneurial world, and our business, more than others, offers a route to the consumer that a budding maker can easily visualize. That is why so many jump into the adult beverage business. It is not as easy to visualize being a airline pilot or a surgeon, but making a wine/ spirit/ beer and seeing it on the shelf of your local retailer is somehow easier than landing a 747 at LAX for the maker to comprehend.
Eyes Wide Open- for every Tito’s the road is littered with thousands of vodkas that did not make it, ran out of money or the distributor buried it for some internal reason. For every Kendall-Jackson chardonnay there is a Finger Lakes chardonnay that is better, more affordable and better rated yet cannot find an audience because of the region in which the grapes were grown. Going into the business and operating the business with a realistic look at the landscape will serve you well, save you money and properly set your internal compass towards success.
Know Your Audience- no matter what you are making, there is an audience. The key to making it work is knowing where that audience is and attacking it. We encounter clients all day/ every day that want to be everywhere. RED FLAG for our team! The audience is limited for a cherry infused tequila from Kansas. While that product doesn’t really exist the narrative does, as a maker, if you think your audience is wider and broader than reality shows, you will be set up for failure. Our position has always been to attack there where demand is strongest or where the likely-hood of a viable audience exists and hit that position hard. We call that epicenter selling.
Financial- As a company position, BevStrat likes to say that we sell financially. We support brands that are good for the retailer to carry, because they will not show up in the Sunday paper at one dollar under cost. When you sell to an account based on slope, grape, grains, distilling method, riddling technique, etc, what you’re really doing is making your brands more like others and less like the unique brand that is yours. Selling into an account with a statement like, “you can make money with this item, and you will not be undercut with this item,” is more important to the independent retailer for survival than the sun position during harvest.
You Control You- we exist in the market because distributors do not build brands. The maker has to fully understand and swallow the fact that selling your brands is entirely commiserate with the effort the maker wants to put into it. Your distributor, no matter how large or how small has hundreds of brands to care about. You have one! If you are assuming that your distributor will take ownership of your brands survival, then please call us in 12 months, and we can help liquidate your excess goods. Invest in your selling and marketing and account visits as this will be the only way you will have long term success. The battle is a ground fight, and you don’t want to be wearing cement shoes.
The #truth is that more brands fail than make it. I will be speaking at Vinexpo in NYC next week and our BevStrat team will be inundated with makers from all over earth that are looking for support in the USA market. A great many of these makers are just looking for a glimmer of hope in selling, account visits, and marketing, and that is not a difficult think to provide and/ or request. A great many will be willing to invest time and money in the success of the brand while recognizing the inherent downfalls of the three tier landscape. What we do is not flying a 747 Jet, but if done wrong or blindly, than your brand will never take off.