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 are the standard fees for getting a spirits brand listed at major UK retail chains like Matthew Clark and Alchemist, and what negotiation room exists?
Matthew Clark charges **£500 per SKU per depot** for listings. With approximately 11 depots in their network, a full national listing typically costs around £5,000 total per SKU—though members report this can be negotiated down significantly depending on circumstances. **Key negotiation tactics:** - **Commit to all depots at once** — committing to the full national roll-out gives you negotiating leverage to reduce or waive fees entirely - **Emphasise category need** — if you can argue the product is essential for those depots' ranges, you can push for no fee - **Use existing relationships** — members report obtaining listings "for free" when they had national account status or strong brand recognition (one member cited a Marco Pierre White listing that secured 2 SKUs across all depots with no charge) - **Contact** — Guy Dolden (Guy.dolden@hillsprospect.com) at Hills Prospect was mentioned as a useful contact **Caveats:** Fees appear to be climbing and costs can mount quickly, especially when adding stock incrementally (one member noted Alchemist listings "costing us more and more"). The £500-per-depot figure is current as of the discussion but may have shifted since. Negotiation success seems highly dependent on brand strength and whether you're approaching as a new entrant or existing account holder.
What payment and returns terms should be negotiated with major retail distributors like Venus, and what leverage points exist?
Members report that major retail distributors typically insist on sale-or-return (SOR) terms and are inflexible—one member was told flatly that if they didn't accept Venus's SOR terms, the distributor simply wouldn't list them. Several members have accepted SOR with Venus and other major groups, though one warned that during market shocks (e.g. Covid), distributors may return stock and invoice unexpectedly. **Negotiation tactics:** - **Assess your leverage**: If you're supplying a high-profile flagship account or have significant volume, push back harder on SOR—distributors are more flexible with larger partners - **Propose partial payment structures**: Suggest a 50/50 split or graduated payment terms based on projected initial depot sales volume, rather than pure SOR - **Add shelf-life clauses**: Insert a condition that the distributor cannot return stock with less than X months remaining shelf life—this limits their ability to return aged inventory - **Understand the buyer mentality**: Distributors like Venus operate transactionally and "aren't in the business of making friends." Smaller operators buying to specific POs are less risky than large SOR commitments - **Accept SOR pragmatically**: If the distributor won't budge and the opportunity is valuable, SOR may be the cost of entry, though members note payment eventually arrives **Caveats**: SOR exposes you to return risk and timing uncertainty, especially during market downturns. Terms vary by distributor; smaller accounts may be safer bets than major chains.
What should we negotiate in exclusive distribution agreements for Asian markets, and what provisions protect us?
Exclusive distribution agreements for Asian countries are common, but members strongly advise against signing unconditional long-term exclusivity without protections. Here's what the community recommends: **Key negotiation points:** - **Minimum performance clauses** — Build in lower performance thresholds than your agreed market plan; if the distributor doesn't hit these, you retain flexibility. - **Minimum order volumes and marketing spend** — Tie exclusivity to concrete commitments. If they hit agreed numbers, exclusivity makes sense; if not, let the best partner win. - **Break-out provisions** — Do not accept a 5-year exclusive deal with no exit clause. Always negotiate a way out if targets aren't met. - **Market-specific caution** — For large markets like China, members warn against granting exclusivity to a single distributor, as the market is too large for one partner to serve effectively. **Caveats:** - Members were unanimous in cautioning against unconditional exclusivity. One noted: "I would be very cautious signing anything for any market with unconditional exclusivity." - The community consensus is that tied performance goals create healthy competition and protect your interests better than blanket exclusivity. - Consider whether you genuinely expect substantial growth in that specific country over the 5-year term before committing.
How should we respond when a large company launches a product with a confusingly similar brand name to ours?
Members' consensus is to avoid lengthy legal battles with large corporations, but use smart leverage tactics instead. Here's what the community recommends: **Assessment first:** Confirm you have a strong trademark position (registered, prior trading history). Get a quick legal opinion but don't assume you'll win a protracted fight—large companies have armies of lawyers and can outlast smaller brands through attrition. **Preferred tactics:** - **Retailer leverage:** Once the infringing product is listed with a significant customer (e.g. Waitrose), contact the retailer directly explaining the trademark dispute. Retailers will pressure the producer to avoid recall/legal risk and will often secure a written concession that it's a limited run only. - **Royalty settlement:** Request 10% royalties on sales as compensation for trademark use, with the condition they cease production under that name moving forward. This converts infringement into a negotiated benefit. - **PR-first approach:** Have your legal team send an initial letter outlining potential settlement (e.g. cease production, donate proceeds to a climate/social cause). Use your PR team to publicise the moral high ground—this embarrasses the infringer's marketing department internally and generates positive coverage. Members noted this works especially well when the community amplifies it. **Caveats:** - Don't waste energy and resources on protracted litigation unless the infringing product directly cannibalises your sales. Limited editions may actually boost brand familiarity. - Beware of Goliath-sized opponents (e.g. Asahi, Puma): even strong cases can be ground out over months, delaying your own launches and draining resources. - The initial cease-and-desist letter is a sound-out; settlement is usually faster than court.
What are realistic retail margins for premium spirits, and how do Ocado and other retailers calculate them?
Retail margin differs from markup: margin is calculated as (Sell Price − Cost) ÷ Sell Price, expressed as a percentage of the retailer's selling price (not your cost). Retailers focus on margin because it represents actual cash profit. **Ocado premium spirits expectations:** Members report **25–30% point of sale (POS) margin**, though this varies. However, margin negotiation is often secondary to the retailer's rotation targets—retailers care more about how much you'll invest to drive sales velocity and cashflow than the percentage alone. **Key margin factors:** - **Margin percentage inversely correlates with rate of sale.** Faster-moving products command lower margins; slower-moving premium lines can sustain higher margins. A retailer will accept a lower % margin on high-velocity Rémy Martin VSOP than on ultra-premium Louis XIII, because the absolute cash margin on Louis XIII is much larger. - **Wine margins are typically higher than spirits margins** (percentage-wise), reflecting different retail dynamics. - **Product value determines cash vs. percentage trade-offs.** A 20% margin on a £1,000 bottle generates more cash than 40% on a £50 bottle, so premium retailers prioritize cash margin over percentage. **Tools:** Members recommend **thinkMargin** app, which includes handy calculators for margin, cost, and price conversions to avoid confusion between markup and margin. When negotiating with retailers, be prepared to discuss your investment in driving rotation as much as the margin percentage itself.
What are the key considerations when deciding whether to use a distributor, and how should founders handle distributor demands for listing fees?
Members report significant frustration with distributor listing fees and upfront demands, which can substantially impact on-trade pricing and margins. **Core issue:** Distributors increasingly demand substantial upfront payments (described as €20k+ in one European case) before committing to stock your product, creating a barrier for smaller brands and affecting the pricing you can offer to on-trade venues. **Recommended approach to listing fee demands:** - **Push back firmly.** Members recommend declining unreasonable demands rather than capitulating. One founder's advice: "Tell them to have a lovely sleep in their bed." - **Understand the margin structure.** A member shared a detailed breakdown of costs and margins across distributors, wholesalers, and retailers (linked in the discussion), which helps founders see where the pressure points are and negotiate from an informed position. - **Be aware of how distributor margins compress your pricing.** The distribution chain analysis shows how each layer (distributor → wholesaler → retailer) takes a cut, ultimately affecting the price available to the on-trade and your unit economics. **Context:** Several members reported being asked for substantial fees or free stock with poor results, describing it as "being mugged for the Christmas party." The consensus is that if a distributor won't commit without large upfront payments, their enthusiasm for selling your product is questionable, and you may be better served exploring direct-to-trade or alternative routes.
When should a brand switch from a retainer-based distributor to other models, and what alternatives exist in the UK?
If a retainer-based distributor isn't delivering results and the model is unprofitable after fees and commissions, it's worth exploring alternatives rather than staying with underperforming partners out of inertia. **Key alternative models members recommend:** - **Tortuga** — Handles logistics and warehousing so you retain margin; you then recruit your own sales team. Members suggest this can be cheaper than traditional retainer models and provides access to online retailers. - **No-retainer distributor partnerships** — Seek distributors (like Cask, Paragon, or Proof Drinks) willing to work on commission-only or performance-based terms rather than fixed retainers. This aligns their incentives with your success. - **Own UK importing company** — Setting up your own entity avoids distributor fees entirely, but requires boots-on-the-ground presence and operational overhead. - **Direct-to-retail targeting** — Focus on 5–10 hyper-relevant, high-end accounts (1–4 sites each) and build deep relationships there; volume follows when venues love the product. - **Direct online channels** — Amazon UK can work well with modest paid ad spend (especially seasonal), and may generate better returns than slow trade channels. **Context and caveats:** - The UK market is currently challenging (Brexit, cost of living, retail consolidation, pay-to-play models). - Trade channels move slowly; high-end on-premise wins may not translate to volume. - Big-box retailers (Waitrose, major chains) are difficult to crack and distributors often struggle to secure listings there. - Being based overseas makes boots-on-the-ground execution harder; consider whether you can commit time or hire UK-based salespeople. - Members suggest exploring conversations with Ciaran Macnic (Tortuga) or the Cask/Paragon/Proof teams to understand their specific terms.
What notice periods and contract terms do D2C fulfilment providers typically offer, and how flexible are they?
Notice periods and contract lock-in vary significantly between providers and are often negotiable. **PHL** initially demanded 6 months' notice with payment of typical monthly rates during that period, but members report they are willing to negotiate—some have secured three-month terms. **Thrive** offers more flexible terms with only one month's notice required. Members recommend asking about cancellation terms early in conversations, as these can be a deal-breaker for early-stage startups. **Diamond** is noted for being quick and responsive in handling queries. When evaluating providers, clarify what "typical monthly rates" means during notice periods, as this can represent significant unexpected costs if you need to exit early.
How can Kindred Collective members use collective purchasing power to negotiate better pricing with logistics and fulfilment providers?
Members identified that pooling volume across the group could create meaningful negotiating leverage. The practical approach is to create a shared visibility tool first, then use that data to approach suppliers collectively. **The tactic:** - Build a shared spreadsheet documenting what each member currently pays logistics and fulfilment providers (base charges, rates, volumes). This reveals pricing patterns and creates a foundation for collective negotiation. - Pool the group's combined volume when approaching suppliers to negotiate better rates. - Members recommended **Bezos** as a logistics/fulfilment option worth evaluating; those interested can request an introduction. - One member volunteered to build and maintain the initial spreadsheet if members populate it with their current provider data and charges. **Status:** This is an emerging initiative with several members expressing commitment ("Count us in", "Sounds like a superb idea") but still in early stages pending spreadsheet creation and population.
What are typical listing fees charged by major drinks distributors, and can they be negotiated?
Listing fees with major distributors are negotiable, though they can feel steep at first quote. - **Matthew Clark** — members have been quoted £500 per depot, with feedback that "there's defo room for negotiation on this." Several members flag this as a pain point, but don't accept the initial ask. **Key takeaway:** The initial quote is not a fixed price. Members recommend pushing back rather than accepting the first figure.
What is the minimum acceptable margin for craft premium brands when negotiating with larger distributors?
Before agreeing to lower margins with a distributor, members advise asking what concrete value you're receiving in return. The key principle is not to focus purely on the margin percentage in isolation, but to understand the full return on that concession. **Key negotiation tactics:** - **Tie margin reductions to A&P budget** — If the distributor is asking for a tighter margin, ensure they're converting that saving into advertising and promotional support on their end. This transforms the cost into marketing spend that drives volume. - **Understand the true trade-off** — Ask the distributor explicitly what they're offering in exchange: expanded listing, dedicated sales support, marketing commitment, faster payment terms, or volume guarantees. Without this clarity, a lower margin may simply mean lower profit with no corresponding benefit. - **Be cautious about switching costs** — Members warned that moving distributor comes with significant risk and typically takes 6+ months to see any performance change. Before accepting margin pressure from your current distributor, verify that switching wouldn't be worse. "Often the grass is greener on the other side of the fence when the reality is there isn't a magic wand to wave." **Bottom line:** There is no universal "acceptable minimum" margin—it depends entirely on what the distributor is delivering in return. Negotiate for value, not just price.
What's the best approach for negotiating lower storage and landing fees with logistics providers?
Members' experience suggests getting competitive quotes from alternative providers is the primary lever. When facing fee increases from your current provider, gather quotes from alternatives like **LAW** and **EHD** to establish market rate and create competitive pressure. However, members noted that logistics providers typically operate on very tight margins—one example cited a major provider turning a profit of just £550k on £52m turnover—so there may be limited room for negotiation beyond what the market naturally offers. The strategy is to use alternatives as leverage rather than expecting major concessions from your incumbent provider.