In the last post, I ran through some of the things you need to be think about as a brewery expanding into new markets. Let’s review:
- Trademark Issues
- Pre-COLA Product Evaluation and Certification of Label Approval (COLA) submission (especially formulation!)
- State brand and label registrations
- State permitting
- Entering into trade agreements with distributors
I want to pause at this last point. Breweries need to be especially concerned with entering into agreements with new distributors because there is so much at stake. Franchise laws are known to be stricter for beer than they are for wine and spirits. In an extreme case, a brewery might even pull out of a state for a year or more and then, if it’s possible, re-enter in order to move away from an underperforming distributor. Ideally, you not only want to find a distributor that will take your brand, but also one that focuses on craft beer or beer imports and will actively market and sell your product. Check out an interesting NYT article recently published on how franchise laws affect small craft beer businesses.
Here’s a brief list of issues to keep in mind regarding your ongoing wholesale operations:
- Periodic registrations – Several states require that you submit brand or label renewals to keep tabs on actively distributed products.
- Tax and shipment reporting – On a state-by-state basis you will be required to file excise tax, wholesale gallonage or shipper reports. These forms can vary widely – some states don’t require them, others ask you to break your sales down by package type, and still others want to know the quantity of cans and bottles instead of in cases.
- Growing your sales in out-of-state markets – from managing the relationship with your distributor (especially in states where you rely on them to do the heavy lifting) to deciding when its time to place a sales rep in a market to exclusively sell your portfolio, growing sales requires active oversight and management.
ShipCompliant now offers a package specifically for breweries that is designed to simplify compliance. ShipCompliant will automatically pre-populate your registration packets and monthly state reports, help you submit COLA applications right the first time and identify brands that might be confusingly similar to your own. To learn more, check out the press release on the launch of the new ShipCompliant Beer Edition.