5 Steps to a Better Distribution Contract

In today’s podcast we dive into the magical world of distributor contracts, and provide Five Steps you can follow to a better contract for your brewery.

The distributor contract is a big point of contention between craft breweries and distributors. Before any beer is delivered, the contract has to be reviewed, debated, negotiated, and eventually signed.

The challenge with most contracts is that both parties want the terms to be in their favor. Breweries want options to get out of the contract, and freedom to move their brand if the business relationship isn’t working.

Distributors want the brewery to be committed to them indefinitely. From the distributor perspective, they invest millions or tens of millions, in infrastructure and want to be sure that brands stay on the trucks to pay for all the investment.

Both parties want the advantage, but at a minimum, neither party wants to get stuck with a bad contract.

With so much emphasis on the distributor contract, what steps are you taking to ensure you get the best arrangement possible?

In this podcast I will outline five steps you can take to improve your contracts, and contractual relationships.

Five Steps to a Better Contract

1. Seek first to understand: Basic contract structure and terms
2. Know your state laws
3. Do your research, ask questions, determine the distributor options
4. Play a game you can win – Develop your own standard contract.
5. Self-distribute – Enter into a contract with yourself

Resources

• Get the free finance newsletter for breweries
• Learn more about the Beer Business Finance Association - a network of beer industry professionals focused on improving financial results