Can a Manufancture in a 3 Tier State Enter Contest

[Wilder]

The question is, if a new manufacture starts in a three tier state, can spirits manufactured be entered in compititions. The reason I ask this question is, if this is possible it would allow some leverage when negotiating a contract with a distributor.

A top quiality spirit would comand a much higher price that an, " I just made this ", I'm a new company", type of talk.

Any thoughts? Mainly legal.

[Palmetto Coast]

Wholesalers and retailers shouldn't have any bearing on you entering competitions. You would still need to pay the excise tax on the spirits, though. I would think that the wholesalers/retailers would love if you won competitions. It might help move your product more, which would put more money in everyone's pockets.

Todd

[Gwydion Stone]

It probably depends on the state the competition is in. I've seen spirits enter competitions in CA that didn't even have a COLA yet. Whereas in TX I couldn't even send a bottle to a tasting event ... legally.

Of course, I personally don't put much stock in competitions because I've seen downright flawed and inferior products walk away with gold medals.

[Ralph at Tuthilltown]

Spirits can be shipped to another Wholesale license holder or another distillery with a bonded warehouse. Perhaps you could contact a distributor in the State to which you will ship and ask them to receive it. The Three Tier System is not directly involved, except that generally goods shipped into a State must go to a licensed recipient. In Control States that means the State Liquor Authority (highly unlikely they will assist).

But the more salient is the question of entering competitions. The ongoing debate, if it is worth it. As the other post commented, often the prize is taken by something not worthy (a relative term). As a veteran of "competitions" in general and as card carrying Judge of International competitions for years I can tell you honestly the winners are the best at that competition, on that day, decided by those particular Judges (all with their own prejudices) and are not a reflection of which product was "best" or "better", these are subjective decisions; and this goes for all competitions not just spirits comps.

That said, if you want to introduce product and sell it on a broad scale competitions are important, because the general consumer is impressed by awards, the more prestigious the better (though truth be told, a competition is generally only as "prestigious" as it's hyped to be, money spent = prestige, not necessarily the best barometer as we all know.) So from a marketing point of view a gold or silver medal offers a small distiller bragging rights, especially if the competition includes some big brands; it is a qualifier the general public uses to gauge the product and make decisions. Some competitions are better than others, some are totally local and useful only for local and regional product lines, establishing credibility at home is the number one priority for a new brand so this is helpful. European competitions are nice to do but generally useless and often group American products into inappropriate categories (we're working to change that); and if you're going to distribute product overseas these are important. But beware of entering the lions den with whisky/whiskey; the EU is totally dominated by Scotch. In fact for the new distiller making whiskey in the US, if it isn't in wood for at least three years you can't call it "whisky" or "whiskey" in the EU. Try marketing "aged grain spirits" against "Highland Single Malt Scotch" and you'll appreciate the problem of not calling your product American Bourbon Whiskey, or Single Malt Whiskey. Who knows what to expect from "aged grain spirits"; but "whiskey" everyone knows what that is.

Competitions are a luxury for the small producer till they are well enough established so the results will count, measurable in increased sales in important markets. For the distillers and the staff they are a fun way to keep enthusiasm up, nothing like a certificate or a medal hanging on a bottle in the distillery to remind the staff why we all work so hard. We just took a couple of gold and silver medals at a recent competition that really went a long way to recharge everyone, and that was for our package, not our whiskey. We are just beginning to enter whiskey competitions and very carefully.

I'm not suggesting competitions are good or bad, they are both. Timing and choice of the competition you enter are the critical factors....oh yeah, and the cost per entry, don't forget that.

[HBD]

Spirits can be shipped to another Wholesale license holder or another distillery with a bonded warehouse. Perhaps you could contact a distributor in the State to which you will ship and ask them to receive it. The Three Tier System is not directly involved, except that generally goods shipped into a State must go to a licensed recipient. In Control States that means the State Liquor Authority (highly unlikely they will assist).

But the more salient is the question of entering competitions. The ongoing debate, if it is worth it. As the other post commented, often the prize is taken by something not worthy (a relative term). As a veteran of "competitions" in general and as card carrying Judge of International competitions for years I can tell you honestly the winners are the best at that competition, on that day, decided by those particular Judges (all with their own prejudices) and are not a reflection of which product was "best" or "better", these are subjective decisions; and this goes for all competitions not just spirits comps.

That said, if you want to introduce product and sell it on a broad scale competitions are important, because the general consumer is impressed by awards, the more prestigious the better (though truth be told, a competition is generally only as "prestigious" as it's hyped to be, money spent = prestige, not necessarily the best barometer as we all know.) So from a marketing point of view a gold or silver medal offers a small distiller bragging rights, especially if the competition includes some big brands; it is a qualifier the general public uses to gauge the product and make decisions. Some competitions are better than others, some are totally local and useful only for local and regional product lines, establishing credibility at home is the number one priority for a new brand so this is helpful. European competitions are nice to do but generally useless and often group American products into inappropriate categories (we're working to change that); and if you're going to distribute product overseas these are important. But beware of entering the lions den with whisky/whiskey; the EU is totally dominated by Scotch. In fact for the new distiller making whiskey in the US, if it isn't in wood for at least three years you can't call it "whisky" or "whiskey" in the EU. Try marketing "aged grain spirits" against "Highland Single Malt Scotch" and you'll appreciate the problem of not calling your product American Bourbon Whiskey, or Single Malt Whiskey. Who knows what to expect from "aged grain spirits"; but "whiskey" everyone knows what that is.

Competitions are a luxury for the small producer till they are well enough established so the results will count, measurable in increased sales in important markets. For the distillers and the staff they are a fun way to keep enthusiasm up, nothing like a certificate or a medal hanging on a bottle in the distillery to remind the staff why we all work so hard. We just took a couple of gold and silver medals at a recent competition that really went a long way to recharge everyone, and that was for our package, not our whiskey. We are just beginning to enter whiskey competitions and very carefully.

I'm not suggesting competitions are good or bad, they are both. Timing and choice of the competition you enter are the critical factors....oh yeah, and the cost per entry, don't forget that.

Thank you Ralph. Neato information for the newer start-ups.

[Andrew]

When we were just beginning to scale our production to distribute regionally, we entered one of our products (our gin) in one of the larger spirits contests. We wanted to get our feet wet and learn the process. Unexpectedly we took a gold.

Distributors we were talking with immediately became much more comfortable with bringing on an unproven product line, and we saw a significant increase in distributors contacting us out of the blue. While everyone still wanted to taste our products and judge for themselves, the award was seemingly an important independent qualifier that gave companies confidence that we were worth talking with.

There are other benefits and a lot of drawbacks to contests, but from the "I'm a new company" perspective you mentioned, this was the least expected and most immediate benefit of taking a medal.

-Andrew

[Wilder]

Thanks

This was exactly what I expected. In a good way.