BlackwaterTM

Happy Memorial Day Weekend! We've been considering how to continue pentrating our market. We have a good relationship with our distributor and they did a great job out of the gates getting us into accounts. We have been on the market for about seven weeks and are in over 200 on and off premise locations. We're trying to focus now on volume in the locations we're in rather than just getting in front of consumers. That and penetrating the bar side of things better, as our distributor is stronger in restaurant/off-premise environments. We tend to over analyze a little bit, at times, so I thought we would throw this out to the group to see if it passes the blush test. Anyone have sales folks working for them on 100% commission? I know other industries do this, and in a down economy, thought we might be able to find a model that helped us establish a greater presence in certain types of accounts. My thought was to approach the distributor on this topic and suggest that if we could bring someone in, they could remove their commission percentage from their markup to help us make it work financially. One requirement would be that this person sell to new accounts, so they would be gaining accounts for lateral sales within, as well. Seems like a good quid pro quo to me (but I am not them!). Before suggesting this, I thought I would just take the temperature on the idea here. I don't want to approach them with it if there is no way the math would work for either party, too. What percentage do you give the sales person so that you aren't giving up too much revenue and they are in a position where they feel fairly compensated? For any deal to be a good one, it has to be good for both parties. Thanks everyone! And if you're in the mid-Atlantic, give Sloop Betty Vodka a try! Jon Cook - COO Blackwater Distilling www.sloopbetty.com www.facebook.com/sloopbetty @sloopbetty

I am on the lookout for a relatively inexpensive software/hardware suite that can help out with warehouse management. Need something that can help keep track of what we have on hand as well as connect a case with a production run should we run into and QA/QC issues downstream. It sure would be nice if it played well with Quickbooks and printed barcodes/tracking codes onto labels. Is anyone using anything they would recommend? Many thanks!!

Thanks for all the input, guys. We will post an 'after action' once we get through approval and let you all know how it winds up.

We have tried speaking to the point that there is inconsistency here, but that has a couple problems inherent. The first of which is that they seem to have a policy against discussing any other label. So far they have refused to discuss any with us. Also, how do you go about it without pointing the finger at someone else who could facee actual financial repercussions? Certainly don't want to put other folks at risk, it is a hard line to draw though. Thankfully the inconsistency seems fairly widespread, so I don't think the need exists to point out one brand or label.

Sorry - I wasn't saying the regs were murky at all, simply the application of them. It leads me to believe there are loop holes here. I guess it could just be inconsistent enforcement leaves some folks happier and some folks less so. Might just be on the losing end this time. Hoping for a loop hole though.

And in all fairness, we could arguably be part of the hindrance. We could just say yes ma'am, yes ma'am, yes ma'am and be done with it. But it's not in the best interest of the company or brand, no one else seems to be required to do it, so the inner monologue is "why me?". I think there is also a degree of skepticism after navigating the regulatory waters leading to this point. The first answer is not always correct, cannot be all the time in any organization.

We're doing Vodka right now - true enough on the it v. they. There is a they hindering the it, however We have been through chapter four, inside and out. Like any proprietary recipe, I would prefer not to have to put it on the label. Our rep yesterday told our president that each commodity in the bottle had to be on it with a percentage! I said "Bull____!"

Just going through the COLA process for the first time and are noticing that what feedback we are hearing from COLA we cannot see applied uniformly across the industry. So COLA is telling us we need to comply to the nth degree of detail on commodity statements and all the other bottle clutter yet I can go out, pick up a bottle of hangar 1 and see nothing referencing a base ingredient on there. Not like it is just them, virtually every bottle on the shelf is inconsistent with the written letter of the regs in some way. Does it just fall to who you get, luck of the draw, when you submit online? (if so, I think we got 'the new guy') I suppose regulation is regulation, but how do you apply it so sporadically? And its like quicksand, the more we struggle the worse it gets. Anyone have recommendations? I have read the other posts in here on COLA and we're going to go into the DC office for a face to face. It is hurting us from a time perspective because we're silk screening the label on the bottle, so every fail causes us 4-6 more weeks to resubmit, if we're lucky! Thanks everyone for your thoughts, Jon

Thanks - just sent a note out a moment ago.

Good afternoon, I am searching for a vendor of 30x44 ROPP tops - anyone using these or have a suggestion on where to look? Many thanks! Jon Cook

What was the phrase? No taxation without representation?

I think that the proposed bill should be written as discussed, but transmitted with an introductory letter that frames our argument from the perspective of competitive disadvantage. We can do this without pointing fingers as we are a 'fairly' young industry by claiming a lack of advocacy during the period when small brewers and vintners were lobbying for themselves. We should enjoy an equal status from a tax perspective with our lower production peers, and the federal government shouldn't impose more restrictions on one beverage alcohol producing group than another simply because of a historic lack of advocacy... Just my .02 USD

Blackwater Distilling, Inc. supports this proposal. Jon Cook

I've never done a poll before, hope this comes out OK. I know this one is kind of a crap shoot, considering the differing environs we all do business in, but I am curious about market penetration as a function of time. Everyone has an estimate of how much they think they can sell prior to embarking on their project. Everyone wants that to be a nice conservative number. What I am curious about is how long it has taken anyone currently in operation to meet their projected sales. Just trying to paint a good operating cost estimate for period from day one in business (after equipment install and prototype completion). Basically, start of commercial production to the day you started meeting or exceeding sales projections. Don't need to share anything proprietary! Thanks! Jon Cook BlackWater Distilling, Inc.

I'd like to think with precedent identified it should be an easier road, but we (ADI) would have to agree on a 'small producer' threshold in terms of production that would be on par with where it is set for the other manufacturers. This is one of those situations where you have to do all the work before proposing it if you have a chance of it going anywhere. Could you link to the small producer regs for the others?

Thanks guys! I appreciate the quick reply. I sent a note off to a brewery finance company earlier and they responded quite promptly that they had not financed distillery equipment before but were definitely open to it. Address is: www.breweryfinance.com I will be perfectly willing to give my opinion on these folks, after it is formed of course! They seem easy to work with so far. Jon

Is anyone financing or leasing their equipment through a company that specifically caters to our industry? Just doing some due diligance and I thought I would contact some of these folks if they exist. Anyone have a leasing company that isn't killing them on price or early opt-out penalities? THANKS!

Does anyone have any advice on how to best estimate mark-up from a wholesaler to a retailer? You can eyeball where the product should be at retail, and get a good sense of the mark up the retailer gives a product fairly easily. Are there any generally accepted rules of thumb about how much the wholesaler marks it up? Sharing some info around this could serve two purposes, help new folks in their earliest negotiations (wink-wink) and also help people feel as if there is an accepted ball park, and know whether or not they are in it! Best Rgds, Jon Cook

I have started a group for those folks who use LinkedIn. Thought it could be a good way to do professional networking within the industry. Anyone who is interested in joining can visit the link below. I had in mind anyone who owns or works in the industry, folks on the periphery, including suppliers and fabricators, and those who are interested in getting into the industry. Join the Group: http://www.linkedin.com/e/gis/82745/08432D1B3909 LinkedIn Groups FAQ: http://www.linkedin.com/static?key=groups_faq Once you join, you can contact anyone in the group and search group membership. People who join the group can look for available job openings, and ask and answer questions. Just thought it would be a cool idea. Jon Cook

That is exactly the kind of information I think it is helpful to share. Not easy topics to respond to in a forum setting, I understand. Thanks for responding! We aren't at the point yet where we're in serious discussions with distributors, but have had preliminary talks with two. One nice (read: quirky) thing about Maryland, though, is that we have four dispensary counties which are like little mini-control systems within a three tier state. We can sell directly to them even with a distributor signed. We are reaching decision time on equipment, and your response to size was interesting. We're looking at going bigger early, in the interest of scalability. I guess in the end we will do what the budget allows and it is that simple. The bottle supply issue is one that gives me pause, I think the best solution in our minds is to pick a stock bottle, one not ever in short supply, and buy direct from the manufacturer. They cost will be more up front, but you're going to use the bottles. Seems a lot of problems occur when the middle man comes into play, or when dealing with custom bottles. Jon Cook

After working on our project for a couple years, I can look back and think about things we could have done differently. What makes me really think is all the decisions left ahead of us. When do you start work on any of the many imminent projects? How long do they take? Where have other people made mistakes and what can the rest of us learn from them? Essentially, what is the best path to take in the face of: Distributor Selection (Three Tier State) Equipment Size (How big is big enough?) Vendor Selection (grain, glass, water) Real Estate (Lease or Buy) Financing (Investors or Loans) Marketing (how much, what kind, to whom, when) Looking back, I can say we should have been more serious about our first business plan rather than go through the process twice. We should have focused on more action at times, and less research. We did learn that full scale equipment and facility are NOT required for licensing approval in all cases, which was a good lesson learned. I guess it would be nice to share what folks have encountered so far, and what they are willing to do to help others facing those same decisions. So, if there was one thing you would do differently, what would it be?

Welcome! Just started actively following the forums myself a couple days ago. We've considered an organic offering here, but will probably do it in limited production. It can be difficult for us to simultaneously embrace the local farmer and organic grain - supply issues. We're trying to use grain solely from the county we are located in, which is a large wheat producer. Not in production yet, we've just received our license, but we're having some moderate difficulty simply sourcing wheat, let alone considering an organic. Finding a local mill will be another story altogether.

I don't think it is for everyone, but I have found it useful in the past. I've been independent for some time and when working as a consultant it can be a very convenient way to store your resume online in a searchable fashion, also noting what type of business engagements you are open to being contacted about. It also serves as a way to network within an industry and recommend other people based on the quality of their work - in a sense, posting references online. I think it is a similar type of application to a Facebook or MySpace, but certainly a different audience and purpose. A better description can be found here: http://en.wikipedia.org/wiki/LinkedIn That said - I was just throwing it out there as an option for those who are interested!

Just thought I would raise this here - wondering how many people use LinkedIn for professional networking? I was thinking that might be a good, non-forum type space for folks to generate inquiries and foster business connections as well. My public profile is here - anyone on the forum I would welcome as a contact. http://www.linkedin.com/in/blackwater

Thanks! Still sinking in, I think... We will break out the champagne when the State follows suit! We should be in pretty good shape there, though. Maryland has actually been great throughout the process.