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when do people take you serious?


Mudpuppy

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I have talked to a few distributors/salesmen and none seam to really take me serious. Does this all change once you get your federal and state permit? Has anyone else had this problem?

Get used to it. Nothing will change until you have something in the bottle. Then it had better be impressive.

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Get used to it. Nothing will change until you have something in the bottle. Then it had better be impressive.

Sometimes even impressive will not do the trick. Most treat us like the plague. Bottle wholesalers are even worse unless you need to purchase 6000 bottles. coop

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MUDPUPPY ~ We're a pre-product company as well, and here's our two cents which we are happy to share with you all based on our past experience and current research on dealing with distributors:

  1. We agree with Timoteo that the most basic requirement is a bottled product; while it's nice to have a great idea, even nicer to have a licensed distillery - without a product and demonstrable demand distributors will likely still not take us seriously.
  2. We unfortunately disagree that having an impressive product is necessary (as there's plenty of evidence that less attractive or tasty products still get distributed) - the challenge in producing a higher quality product is that the product then requires a higher retail price, which in most cases means lower demand, thus lower sales, thus lower interest by distributors who make their money off products that sell.
  3. Packaging does help though it is by no means a distribution clincher; while it helps in capturing customer attention it really means nothing to them unless the packaging is so unique that it drives sales.
  4. Distributors want to know what we've done to influence "consumer demand" for our products that will drive continuous sales - technically their job is to distribute our product to retail outlets where the products will be sold (caveat: some distributors will establish accounts for our products - for a fee, though will rarely if ever serve as our marketing team)
  5. Distributors will also want assurance that we possess the ability to scale our inventory quickly in the event our product starts selling well so as to prevent them from needing to inform accounts of supply shortages - which can often lead to retailers cutting back on future purchases due to uncertainty about supply.
  6. In lieu of high consumer demand (in which case distributors will be calling us for product making this question moot) in all likelihood they will require us to provide product marketing support to help in attracting consumer interest to drive demand (store displays, coupons, press mentions, advertising etc.)
  7. And once we are signed to a distributor, the less marketing support we offer them the more discounts they will seek from us to hedge their risk in carrying our product - their ideal situation is for our product to arrive at their warehouse and be immediately or within a very brief amount of time, transported out to accounts vs. being forced to hold our products as inventory in their warehouse until enough demand is achieved to get our product out of their warehouse (which adds storage costs, thereby cutting into their distribution profit margins).

Thus our focus right now is split evenly between:

[A] getting our distillery up and operating so we may have bottled spirits to show and share with people

establishing relationships with our target customers as much as possible and in every way possible so as to establish pre-demand for our products.

Our goal in taking this two-tiered approach is to test our theory that when we debut our products our fan base will rally to support us by showing up at stores expressing demand for our products - which we then would like to result in a few distributors calling us to negotiate terms rather than us being required to call all of them and deal exclusively on their terms.

Our assumptions above are based on our previous experience as owner/operators of a specialty food manufacturing business and we have theorized that distribution tenets in that industry likely apply to this industry as well. We're sure there are other unique aspects to liquor distribution and look forward to seeing what other people have to report about this fact of doing business.

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It's like a dysfunctional marriage. Tread carefully. Many expect $40,000 to $100,000 in a marketing budget. Smaller boutique guys may be better, but beware of the terms. Why is it that we pay up front for everything and they don't? Three tier laws from the '30s.

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  • 3 months later...

You're getting good advice here so far. And expect no one to take you seriously till you have your distillery up, producing; and you have placed it on some shelves or back-bars. It is typically a very much longer road than you expect it to be at the outset. Our NY license permits us to hold a Distributor license as well so we can "self-distribute", which is how we started selling vodka and whiskey, out of the trunk of my car from Lake Placid to New York City. In most cases no one can sell your product like you can. At a potential retail counter I would often hear someone call to the boss, "It's a liquor salesman." I would stop them and tell them, "I'm not a liquor salesman, I made this stuff myself and it's the first legal whiskey made in New York since Prohibition", that usually got their attention and I more often than not found myself being ushered past other waiting liquor and wine salesmen and into the owner's office. When you have a stable of on and off premise accounts that like you (and that is very important, cause they don't like most liquor salesmen) then you take that client list and start looking for a distributor who is sympathetic, who likes the whole "home town guy makes whiskey" story and can place you with the best restaurants and retailers. But always remember they're buying into your story and your energy and dedication as much as they are buying a bottle filled with your whiskey. Beware big distributors who offer you the world, once they have you, you are stuck with them. Vet prospective small or medium distributors and ask around among the on premise accounts you found and ask from whom they buy their spirits or wine, then take a look at those distributors. Guard also against the distributor who would bury you in the back of the warehouse. Remember that liquor and wine salesmen are on commission, and they have quotas to meet; they would rather spend the limited time they have with a buyer writing orders for such as Johnnie Walker or Absolute or Gray Goose than trying to convince some retailer to commit shelf space to an unknown brand. If the field reps are not into it, it will not move and you'll find your pallet of product stashed behind a phalanx of Cutty Sark and Gordon's Gin; lost in the archives like the Ark of the Covenant in the last scene of RAIDERS OF THE LOST ARK. Good luck.

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  • 1 month later...

Sometimes even impressive will not do the trick. Most treat us like the plague. Bottle wholesalers are even worse unless you need to purchase 6000 bottles. coop

It seems like the only way to get attention is to do what Phil Pritchard did, make some small batches at home and let people try it. When people know that you can make a good product then they can see you actually making a business of it.

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What, what, wait, Sensei, maybe I misread what you meant to say. Perhaps it was a "tongue in cheek" comment. Could you mean get all your permits and licenses first and then produce small batches in an approved facility, etc, etc...

Not at all. I know my comments will rankle a few people, but liquor laws are like car importation laws - there to protect the corporations not the public. I'm not saying a person SHOULD make "illegal" alcohol", but the system is set up in such a way as to discourage honest work. It is my personal opinion that if Stupak can ever get enough votes to allow home distilling (as we have home brewing and home wine making), you will see a genuine Renaissance in spirits.

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Sorry to disappoint, but the scenario you paint is highly unlikely. Home distillation, if it ever is permitted in the US, will not happen for a long long while.

And the law is what it is. A serious business developer aiming at developing a distillery will take the time to know the risks AND the law and use both to his/her advantage. It is definitely NOT ADVISABLE to distill at home. If you want to join the "club" of distillers, follow the law, build your facility, get your license and start to make and sell your product. The process and legal work is so important only a very foolish person would undertake the project and start out by making illegal spirits. Perhaps you are unaware, even owning the PARTS of a still in the US without a Basic Permit is illegal.

We have limited options in dealing with arcane law and the control of spirits by major corporations. The first is KNOW AND FOLLOW THE LAW; BE CREATIVE in the context of the law; CHANGE THE LAW it is possible. Both take time and money and effort, "honest" work.

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The explosion of small, legal distilleries in the United States in recent years is evidence that the legal obstacle course is not as daunting as it used to be. This came about to make it easier for farmers to distill their own ethanol for fuel, but the same rules apply to beverage alcohol makers. That's federal. State laws are another matter and, as always, they vary.

The reality is that although it is illegal to distill potable spirits without a license, a person who does so on a very small scale, who doesn't try to sell his or her product, is at very little risk of prosecution.

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Guest sensei

The explosion of small, legal distilleries in the United States in recent years is evidence that the legal obstacle course is not as daunting as it used to be.

Yet it still remains a major obstacle. Look at the number of microbreweries and brewpubs that have sprung from home brewers who honed their craft prior to ever selling. There is no way to experiment and practice so that you can legitimately talk to investors/retailers/wholesalers/anyone about your product. I know why things are the way they are and I know that it will remain so in this country. This is why I have no desire to open my business here.

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If you expect to fail you'll never be wrong.

Especially when the laws are designed to ensure that such a thing happens. Like I said, I won't do business in this country. Research yes. Business no.

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Especially when the laws are designed to ensure that such a thing happens. Like I said, I won't do business in this country. Research yes. Business no.

May I suggest Ukraine for you. I know you have the potential to make some good spirits there (I have tasted some excellent brandy). You can avoid many regulations if you have good connections and plenty of money. The connections part would, however, be notably difficult, especially if you do not know Ukrainian or Russian. CFry

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  • 1 month later...

Especially when the laws are designed to ensure that such a thing happens. Like I said, I won't do business in this country. Research yes. Business no.

If the laws are "designed to ensure" failure, how is it so many new distilleries are getting open and their new products out to market?

My partner and I did it alone, with our own money, with own hands and brains, from scratch in four years with no previous experience. The attitude reflected in your comment is what ensures failure. The simple answer: If you don't like the law either leave or change the law. The more difficult answer: Roll up your sleeves and get to work and stop using the law as an excuse for not producing.

R

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I've told people that when you plan to start a distillery you have to believe that you cannot fail.

I also tell people I think it might be the most difficult businesses to try and start. But not impossible.

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If the laws are "designed to ensure" failure, how is it so many new distilleries are getting open and their new products out to market?

Allow home distilling and then you'll see what I'm talking about. Look at how many homebrewers perfected their skill at home before opening up a brewery/brewpub. The system as it is now is designed to ensure that there are very few distillers

My partner and I did it alone, with our own money, with own hands and brains, from scratch in four years with no previous experience. The attitude reflected in your comment is what ensures failure.

This is your opinion and you are free to have it. However, I am realistic enough to know and I have experience with a micro-distiller who did as well that it is easier and better to perfect your product before asking for money from people on hopes and dreams. See my beer comment above about why it is so much easier for them. Granted, you were successful, but I prefer the easier and much more logical route that has nothing to do with failing. Pritchard just never got caught.

The simple answer: If you don't like the law either leave or change the law.

Got that covered. I am moving back to Japan this July to start my teaching job and to live for the rest of my life. It is there that I have researched the laws and the market and it is there that I will open a small distillery. I would prefer to stay in the US but sadly, I am more free in Japan than I am in the US and the worst part is, I know it and no amount of BS propaganda can change that.

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Got that covered. I am moving back to Japan this July to start my teaching job and to live for the rest of my life. It is there that I have researched the laws and the market and it is there that I will open a small distillery. I would prefer to stay in the US but sadly, I am more free in Japan than I am in the US and the worst part is, I know it and no amount of BS propaganda can change that.

bye

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  • 2 months later...

Bye Sensei, good luck in Japan. (It was always my understanding Sensei means Teacher. This is not an honorable example to set.)

Mudpuppy, don't let the naysayers and those who retreat from the challenge get you down. It is a typical rant among those who do not DO, that it is the government's fault, or the law, or the neighbors, or George W. Bush.

The truth is in the doing. It's easy to complain, blame and leave. And you know what, it only clears the playing field of the duffers and leaves the rest more room to grow and prosper. Good luck.

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