If you are a new beer, wine or spirits brand looking to expand into the U.S. market, you need to develop a detailed plan that covers every aspect of your business – including marketing, operations and sales. Adam Lambert, VP of Sales for Virtue Cider outlines the odds of success may be stacked against you from the outset, but there’s a lot that you can do to improve them over time.
STEP 1: Figure out why you want to become a national brand
These are key points that you must think about and work on before embarking on this journey:
• Plan the work, work the plan, it takes some thinking.
• What’s your story?
• Will you and the story be relevant?
• What’s in it for you and what’s in it for the consumer?
• Is there an end to the means?
• Can you afford this trip?
On paper, of course, being a “national brand” looks impressive. But what are you really trying to gain, and what types of expectations do you have for the future? Lambert advises brands to develop a literal “playbook” of ideas. If you don’t get it into writing, your plan probably isn’t going to work.
One of the most important things you can do here is to figure out what your story is going to be, and what elements of that story are most likely to resonate with wine, spirits or beer drinkers. Simply saying that you are a “fifth generation brewer” is not enough if you really want to go national. That might matter to people in your immediate geographic area, but what about people in New York and California?
If you want to become a national brand, what is your end objective? What will you do once you are in all fifty states and what is beyond that goal for your brand and company? For example, do you plan to work toward increasing sales and penetration in the US market or go international?
To become a national brand, you must plan for the costs involved. There are registrations to take care of in each state. Sometimes the volume being sold in a state may not even be worth the effort and costs to keep registrations current there. Transit costs and market visits must also be considered. Each penny adds up to the big dollars that will be spent in taking your brand national.
STEP 2: Come up with your strategic plan
A company or brand must have a clearly-defined strategy and work towards it in order to achieve real results. As Lambert notes, there are five different approaches to “going national.” They involve taking the steps and pacing out the stages.
• Local - Concentric circles.
• Regional - Multi State.
• National - Pick the markets that are right for you.
• Shotgun approach - Scattered throughout.
• Anchor Accounts - Building your expansion on great business partners.
One approach is what he calls the “concentric circles” approach. Think in terms of 100-mile concentric circles around your home base. Then, continually widen those circles by 100 miles at a time so that your area becomes bigger and bigger. This strategy was used successfully by the team for expansion when Lambert worked with the popular Dogfish Head Brewery.
Another approach is to opt for a regional strategy – simply pick a region like the East Coast or West Coast, and then drill down on all the states in that region. Yet another approach is a strategy where you simply cherry pick the biggest markets – California, Texas, Florida, New York, Illinois – and build out from there. Perhaps the least effective strategy is the one that many brands adopt – the “shotgun” approach, where you simply scatter your product wherever you can find distribution or demand.
There are major national retail chains like Total Wines, Wholefoods and Krogers who may be interested in carrying your brand in a few states. You can anchor into those accounts and build your distribution in those states from there on.
STEP 3: Develop a precise timetable
Timing: It takes way longer than you think!
• Time lag in TTB, Fed and other approvals due to high volumes.
• Give yourself plenty of time to meet and greet distributors.
• Make sure you got all your paperwork in line - There’s a lot of it!
• A little legal advice goes a long way. Build your check list and listen
However long you think it will take to become a national brand, it will take longer, says Lambert. At a minimum, it will take 12-weeks to get all the necessary approvals to expand in a territory outside of your home market.
Give yourself plenty of time to go out and meet the distributors. There will be many distributors to meet and it takes time to get things up and running event after you have met.
Get all your paperwork in order. There are several layers of registrations and federal regulations that you have to comply with, so work through these. And don’t forget about legal representation – a top-notch corporate attorney can help you navigate any confusing state legislation. This can involve details like sampling, label approvals and tastings and then distribution agreements.
STEP 4: Put together your portfolio
• Portfolio: Today is way different than yesterday!
• Build a portfolio that is easy to execute.
• Have a story for why these brands will sell.
• Not every market needs the same portfolio.
• Manage your SKUs for maximum sales.
• Traditional timing is simple - Core, Seasonal, Limited Release.
• Keep in mind your account base.
As a national brand, you will need a portfolio of products that you can offer. So build a portfolio that’s easy to execute, says Lambert. You need to have a story for why you are offering certain products. And remember – not every market needs the same portfolio. For example, if you are trying to expand into a market with a lot of craft beer drinkers, the goal might be to offer only a set of “crazy” and “exotic” beers that will get the attention of consumers and establish your reputation. This strategy worked well for Dogfish Head Beer, where they kept a selection of their core products for their home market and sent out a selection of different, high-revenue beers to the West Coast keeping in mind that the population there was well-traveled and had an appetite to try something out of the norm.
There’s a cost involved to maintaining a portfolio, so manage your SKUs for maximum sales. You may only offer six-packs or four-packs, for example, if you are a beer brand. Get a feel for what will work in a particular market segment and limit your SKU offerings to those.
And remember – traditional timing is simple and it works. You will want your “core” product, as well as a “seasonal offering” and a “limited release” offering.
When thinking about your account base, analyze your brand’s target market. Is it a brand that will work well in an on-premise environment and if so, create and market the product and packaging accordingly.
STEP 5: Pick your distributors
The choice of the distributor you pick is extremely important, and one that should not be taken lightly, says Lambert. In fact, he compares the act of linking up with a distributor to “getting married for life.” Thus, you need to be able to think five years out and see how your relationship with the distributor is going to grow and evolve during that time period.
- Think about where you see yourself in five years in terms of distribution and volume.
- Survey the market on your own. Phone Calls are the same as stepping in the store.
- Plan ahead and get your information. Carry out a Distributor survey.
- Build out a 90-day plan.
- Have some objectives and measures of success.
- Understand the language you are working in.
To make sure you pick the right distributor, spend time to survey the market on your own. See who’s doing the job in the area where you want to have a presence, and get a sense of each distributor’s strengths and weaknesses. Plan ahead and start assembling all your information about these distributors. Then, build out a 90-day plan.
Ask yourself pertinent questions like what you want them to do for you in 5 years and your expectations from them. Find out what their level of service is, what their commitment is to you and your brand’s growth and how many accounts they call on. These are relevant questions will help you vet distributors for your brands.
Even before you go out to meet a particular distributor, survey the market on your own. Talk to different distributors, call some accounts, ask them who their favorite wholesaler is, see how distributors are doing their job on the field and how their POS execution is. In doing this, don’t get swayed by others opinions, rather see for yourself and come to a decision as to who the best wholesaler is for your company to work with.
Lambert and his team carried out a one-page survey with their potential distributor even before meeting them in person, that covered deeper questions like what was in their portfolio, if they had a national accounts team, their merchandising and if they did line cleaning. This gave them an understanding of how they worked, who they were and if they would be a right fit for their company.
Include some objectives and measures of success to make sure that you keep to this plan. The goal is to have tiny victories throughout each 90-day period, so that over a year, they all add up to one big win. These small achievements also help a distributor to keep the focus on your brand.
Familiarize yourself with the acronyms that distributors use commonly to measure and talk about the business, like PFPs, billbacks, KPIs, PODs, POS so that you can follow along with them in a conversation effectively.
STEP 6: Choose your accounts
Which accounts will you be focusing your energies on? Your big accounts are where you are spending most of your time and efforts, so make them count.
- Build a simple quick plan.
- On Premise vs. Off Premise.
- On-premise: Rotation nation.
- Off-premise: Shelves and floor space aren't getting any bigger.
- Find your partners.
- Class of Trade.
- Strong local.
- National Accounts.
- Compelling selling sentence: What’s your hook?
Build a simple, quick plan. Take into account your on-premise and off-premise strategy. Remember: store shelves and floor space are not getting any bigger, so there’s limited space for your product. Restaurants and bar owners are also constantly on the hunt for the next big thing. What is your strategy to hold on to your space? Maybe there’s a seasonal program you would like to introduce or you have a core product that you can promise to keep in stock 365 days of the year.
From there, it’s a matter of finding the best business partners. You can select them according to a number of different criteria, including “class of trade” (e.g. white-tablecloth restaurants and craft bars) or whether they have a strong local or national presence. And remember to come up with a compelling selling sentence and a strong “hook” to get these accounts interested.
When you’re expanding, you need to know who these different key accounts are and what business you will be doing with them. For example, you may be targeting ten key craft bars in one state, independent liquor store owners in another or designing a display program for Wegmans or another national retail chain elsewhere.
STEP 7: Tell your story nationally
Telling your story is all about what Lambert calls “bringing your personal circus to town.”
• Events - Roll outs.
• Press - Find the local guys.
• Media Plan - Tie all your activities together into an up-loadable story
• Point of Sale - you need to have something.
This is a chance for you to become creative, as you hold roll out events or contact the local media. Find the local press that matters, and feed them your story. Come up with a media plan that involves an “uploadable story” (i.e. engaging content for Facebook, Instagram and Twitter). Finally, consider what media assets you will have at the point of sale – you have to have something.
Adam also advises that a sales rep (or a few) are key to making your vision of creating a national brand into reality. There are several ways of reaching out and making sales, be it over the phone or working a different market every month in a shotgun approach. National accounts are also an integral part of this approach as they enhance your brand’s image and help move a large volume of product.
At the end of the day, if you develop a launch plan that considers all these steps, you can become a truly national brand. But there’s one more secret ingredient that will bind together all these steps - and that’s people. There are more “people on the street” than ever before, hustling to get their products onto store shelves, so you really have to make an investment into creative, passionate and skilled people who are driven to make your brand a national brand.