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BUILDING NEW BRANDS & BUSINESSES PRODUCT & BRAND DEVELOPMENT STRATEGY & FINANCIAL PLANNING PRODUCT LAUNCH SALES & MARKETING EXECUTION
Maine and Iowa). Nearly all states require the preparation of a new product proposal that includes an overview of the product, your in-state marketing plans, analysis of your product’s category trends, data from sales in other control states (if available), and a few states require an explicit exit strategy if the product fails to meet thresholds. Although there is a growing trend toward online registrations, most states still require an in-person presentation (5-15 minutes), if invited, to move forward. To conduct business with the state, supplier companies are required to obtain outof-state shippers licenses and brand registration (part of the listing process), and about a third of the states require that the supplier have an in-state broker to represent the brand. The National Alcohol Beverage Control Association (NABCA) is the national association representing control states and provides many resources to potential suppliers. The two most important to suppliers are their standard price quotation form and control state codes. All control states work on a fixed markup strategy that includes their state excise taxes. While the markups and taxes vary by state, most have adopted a standardized price quotation form (with occasional minor modifications) that makes pricing transparent. All control states also require specialized case labeling with state-specific case codes in order to track product through their supply chain. About half of the control states use a control state code (CSC) that is issued by NABCA, while the remainder issue their own code upon confirmation of listing. The placement on each case is consistent across states, but the required final printed size varies. A few states require container labeling for various things such as bottle deposit (e.g., Iowa and Maine). Although the nuances and requirements for each state are beyond the scope of these articles, I hope that this brief introduction guides you through the major issues of working with control states. Success in control states requires managing the relationship and clear marketing and rollout plans. But if these efforts are undertaken, then control states can be immensely lucrative markets. I think that most people avoid control states because these issues appear to be a barrier to entry and suppliers fail to realize that the alcohol boards of control states are willing to provide data and collaboration. To many suppliers, it certainly feels harder than just finding a distributor and letting them worry about in-state sales. But in reality that doesn’t really work for most. So why not invest some upfront research and effort into a more equitable market and then proactively manage your business in the same way you would in an open state?
R. Scott Winters, Ph.D. is founder of The American Spirits Exchange. For more information, visit www.AmericanSpiritsLtd.com or email Scott@AmericanSpiritsLtd.com. REFERENCES Mendelsohn, R. From Demon to Darling: A Legal History of Wine in America. Berkeley: University of California Press, 2009. National Alcohol Beverage Control Association. www.nabca.org Thank you to the alcohol control board of each of the control states for providing up-to-date information.
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