The producers are mandated to sell only to wholesalers
while wholesalers sell to retailers.
Wholesale beer distribution is profitable, capital intensive and
moderately challenging
You tie down at least 60% of your investment in
inventory, logistics and distribution channels. The competition for this sector
is formidable however the benefits and remunerations from brewers are worth the
effort.
To succeed you need a formidable marketing and
distribution strategy including networking with retailers. Retailers are the
engine room that dictates your profitability.
The good part is that wholesalers have lots of choices in
large and small independent brewer’s including importers. You need extensive planning,
market analysis, a feasibility study and business plan to start the enterprise.
The complexity of the business involves supplies, beer
choice, delivery service and retailers. You will face stiff competition as a
beer wholesaler from better funded and established dealers in your community.
Before starting
you need to understand the modalities, operation procedures, guidelines, rules
and regulations. To launch your enterprise conduct surveys of retailers and
wholesalers in your locality.
Focus on preferred beer of choice, distribution and
expansion goals. You need to provide an efficient delivery services and
business structure.
The three major startup concerns are funding, acquiring a
wholesale distribution license and writing a comprehensive business plan.
How to Write a Business Plan
How to Write a Business Plan
Wholesale
Beer Distributor Business Plan
The business plan should start off with an executive,
company and financial summary. You need a product and service review including
a strategic analysis, and marketing plan.
Include an expanded financial plan and private placement memorandum.
The amount needed and purpose of the business plan should be clearly stated.
Include operational and financial expectation for the
next three years. Explain your customer
base, income sources including product details and brewer of choice.
Funding
the Wholesale Beer Distribution Business
To secure funds from commercial banks you need to provide
your business plan and feasibility study. The business plan could be a PowerPoint
presentation.
Make sure your
financials cover bank loans, interest, agreements and loan duration including
fixed interest rates. The funds are needed for six months working capital,
inventory of drink products and location development.
Your sales forecast should include sales projection for 3
years and operational costs. Add the EBITDA, taxes, interest rates and
depreciation before reaching a net profit. You should also include in your
financials a 3 year expansion plan.
Registration
and Licenses
The beer distribution business is heavily regulated and
you might need state and federal licenses. You need an employee identification
number and an alcohol sales permit.
The alcohol distribution and sales license provides a
legal framework for the sale of alcohol. You need to follow strict compliance
with federal and state laws guiding the business.
Other permits are from the food and drug administration. The
state and federal licenses facilitates membership in associations.
Contact
Brewers
You need to secure a dealership permit from major beer
manufacturers in your locality. Major brewers have an effective dealership
program for wholesalers.
Approach the brewers directly and secure contractual
agreements. Brewers are loyal to major distributors and there is a chance that you
will be referred back to such an enterprise in your area.
Offer a broad selection of beverage products and focus on
a major manufacturer.
Locating
the Wholesale Beer Distribution Company
The location should offer your distribution network a
competitive edge. Try to research local competition, customer profile and end
user including retailers in your community.
Lease a warehouse and provide docks, refrigeration cases,
raking system, stacking and trucks. Ensure the warehouse from burglary, fire
and get insurance cover.
Beverage
Distribution and Marketing Plan
Maintain an extensive marketing campaign to targeted
retailers and develop an online strategy. Include your company profile in
yellow pages, online classified and newspaper publications.
Major brewers
provide wholesalers lots of support through signage, billboards, posters, gift
items including lots of promotions and discounts. The popular brands are
seriously marketed by the major brewers so your primary function is to reach
retailers and event planners.
The wholesale price of your products is regulated by the
brewer. The wholesaler earns income though bulk sales and margins.
The more beverages you sell the higher your profit. To
remain competitive stay abreast of fast changing market trends, tastes and
interests.
Corporate
Organization and Personnel
Hire competent staffs that are hard working and
dedicated. Your management structure could include senior management,
operational staff and administration.
You need customer service, accounting, facility
management, sales and marketing department. Hire security staff, cleaners and
casual laborers.
A
Basic Knowledge of Beer
Wholesalers should have a basic knowledge of the product
they want to sell. Fermented ales and larger constitute what is referred to as
beer.
They are made in different ways which constitutes the
diverse tastes and flavors. Some are gluten free, barrel aged or special brews.
Ales are fermented at warm temperature while lager is cold
fermented at relatively shorter periods. Stout ale includes Brown, Pale, Mild
and Bitters.
A
List of Beer Types
Here is a list of a few beer types in the market
Dark and sweet Malts
Blonde Ales
Amber Beer
Dark Amber
Dark Ale
Fruit Beer
Golden Ales
Lime flavored
India Pale Ale
Red Ales
Wheat Beer
Oatmeal Stout
Irish Dry Stout.
