Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What steps should I take to recover money owed when a distributor enters administration?
When a distributor goes into administration, your recovery options depend heavily on whether you have retention of title clauses in your contract. **If you have retention of title:** - Contact the appointed administrator as soon as they become available and raise your retention of title claim immediately - If you have general retention of title (rather than order-specific), you have broader scope to recover goods - Technically, you may be able to collect unpaid goods from the warehouse, though in practice administrators often restrict access - Any stock sold by the distributor after administration that remains unpaid goes into your claim if you can demonstrate you retain title - Gather lot numbers and batch information for all unpaid stock now, before the administrator takes control—this makes your claim easier to substantiate - Push hard to have any retro payments or marketing fees the distributor owes you contra'd against what they owe you for stock; otherwise you may pay full marketing costs but recover only pennies on the stock that generated them **If you don't have retention of title:** - You must wait for the administration process to complete - Expect to recover only a small percentage ("pennies in the pound") as an unsecured creditor - Keep your debtor/creditor ledger clean and well-documented so administrators don't need to spend time wading through unclear records **General preparation:** - Members recommend treating insolvency risk as an ongoing indicator of distributor health; early warning signs like sudden payment delays or stock sell-throughs should prompt review of your terms and exposure - Ensure your contracts include clear retention of title language going forward
What should you do if a distributor or co-packer suddenly shuts down or goes out of business?
This is a real risk in the drinks industry. Members who experienced unexpected closures (such as the Brittains Beverage situation) report it can be a major disruption to recover inventory. **What happened in practice:** - Members caught in the Brittains closure faced an "absolute nightmare" trying to recover liquid, boxes, capsules and other materials held at the facility - Recovery required "determination" and direct effort to retrieve goods; it was not straightforward or automatic - Some suppliers may have a significant proportion of bulk inventory stored at a single facility, creating concentration risk **Preventative steps members suggest:** - Before committing inventory or materials to a distributor or co-packer, understand their operational footprint and consolidation risks (e.g. whether they operate multiple sites that might be rationalised) - Consider requesting vetting help from the DBT (Drinks Business Trust), which maintains an accredited buyer list as a baseline check - Build relationships directly with your co-packer/distributor contacts so you have a personal channel to escalate if warning signs emerge **Caveats:** - Even with warning, recovery of goods is time-consuming and resource-intensive; there is no automatic process - Bulk inventory held at a single location (especially if it's a consolidation play) puts you at higher risk - No foolproof protection exists—the best approach is due diligence upfront and maintaining alternative supply chain routes where possible.
What is the most cost-effective sales approach for premium spirits in on-trade versus off-trade channels?
Premium spirits require different sales strategies depending on channel maturity and brand stage. Early-stage brands often struggle to justify dedicated regional sales teams on ROI grounds, especially in on-trade where bar loyalty is weak and listings are short-lived. **On-trade (bars/restaurants):** - **Direct founder-led sales** — Members emphasize that founders win more business than hired salespeople because buyers value founder relationships and product knowledge. Consider hiring ops/finance staff instead so you can spend more time selling yourself. - **Small geographic focus early** — Hit a small area hard, build relationships through repeat visits and personal drinks with bar staff. Hire someone passionate and charismatic rather than an expensive salary hire; listing conversions take time and national accounts demand heavy rebates and listing fees. - **Hybrid distributor + small in-house team** — Partner with a good niche distributor who has existing on-trade networks and represents several high-quality brands. Keep your own payroll small and focus on making your brand the distributor's best performer. This reduces upfront investment while leveraging their relationships. **General considerations:** - **Regional teams struggle on 1-year ROI** — Members who've run regional and national teams note these rarely pay back in year one; they're longer-term investments and require feeding in larger national customers to make the economics work. - **Distributor vs. in-house trade-off** — Distributors reduce outlay and provide a "moment of truth" reality check on where your brand actually sits in the market (versus founder optimism). However, your brand becomes part of a portfolio and won't receive exclusive focus. - **Stage matters** — Early days demand geographic focus and relationship-building; scaling to national accounts requires commercial discipline, bigger salaries, and tolerance of expensive listing fees. **Caution:** Members warned that even strong salespeople struggle to justify ROI when bar margin matters more than loyalty, and that hiring sales teams can expose your brand to harsh trade scrutiny—sometimes revealing the brand isn't at the level founders believe.