How is the report created?

The WinesBusiness Analytics team created an algorithm that uses a database of more than 11,000 U.S. wineries to extrapolate all DtC shipments from millions of anonymous transactions filtered through the Sovos ShipCompliant system in 2023. The model tracks DtC wine sales by winery region, annual winery production, destination of shipments, wine type (varietal) and price points.

Each DtC shipment is edited for submission for governmental tax and reporting requirements, and certain elements such as varietal are validated by standardized tables. The data is submitted to a proprietary model that applies weighting to assure that aggregated transactions evenly reflect winery size, location and average bottle price. This database is a near census of U.S. wineries (>99%). The model incorporates recognized statistical techniques to identify outliers and data anomalies.

Why download the 2024 DtC Wine Shipping Report?

U.S. wine producers will find this report invaluable in informing data-based decisions for their businesses. For example:

Identify top shipment destination states to bolster planning for expansion into new ship-to states.
Understand what the evolving DtC wine shipping consumer base is looking for in terms of varietals, price thresholds and more.
Evaluate pricing and product mix in the DtC channel going forward.

DtC Wine Shipping ROI Tools

An interactive ROI calculator and map that enable informed decision-making about entering new direct-to-consumer wine shipping markets

Just getting started with direct-to-consumer wine shipping? Looking for additional, new markets to ship to? If you’re trying to determine whether a state is worth the investment, these ROI tools — a handy map and an interactive calculator — can help.

These tools will help you identify the most profitable new destination shipping states for your DtC wine business—and we’re always happy to help as well. Request a demo today to see how Sovos ShipCompliant solutions can streamline your direct-to-consumer compliance, tax, filing and reporting needs.

Map

Our direct-to-consumer ROI map displays key information that direct shippers will want to evaluate for each state in which direct-to-consumer wine shipping is permitted:

Ease of getting started, a rating based on criteria including number of forms to be completed, paper versus electronic submission access, any bond requirements, degree of requirements for corporate officer information, background checks, and other factors
License type required
License fee
Direct-to-consumer shipping volume rank for the previous calendar year, as reported in the annual Direct-to-Consumer Wine Shipping Report

*All information and data as of January 2023

ROI Calculator

Use our interactive direct-to-consumer ROI calculator to help you determine which states you should enter first. This tool allows you to select a state you have under consideration to identify the number of orders required to break even against the costs of licenses, tax and report generation costs.

Looking for even more resources for direct-to-consumer wine shippers than these ROI tools? Check out our DtC Wine Shipping Compliance Rules page for a state-by-state breakdown of how to comply with each state's DtC wine shipping rules.

For breweries looking to expand their beer distribution, there are numerous rules and requirements that need to be followed and failure to do so can get in the way of expanding your reach or even block you from getting in there at all. A clear understanding of what is allowed where, what isn’t, and what’s required of your business by state and federal regulators is essential to successful market expansion.

Brewers have a ton of regulations to abide by; it’s true when you set up your brewery and it’s true when you want to sell into a new state—the importance then is recognizing what that new state requires.

How did we get here, anyway?

The 21st Amendment set up a national system where each state can establish its own individual rules for the sale, production, transportation, and consumption of alcohol within their borders. This means that when you do any of these activities in a particular state, you have to follow that state’s laws—and they can enforce these rules on any business engaging in these activities within state lines.

For every state you distribute into, there’s a whole new set of laws that you need to follow, adding to the intricacy of interstate distribution. This is where a lot of breweries can get caught—assuming that what is allowed in their home state automatically translates into permissible activity in new states.

This is where a lot of breweries can get caught— assuming that what is allowed in their home state automatically translates into permissible activity in new states.

In-State and Out-of-State Beer Distribution Permissions

Selling beer in your home state

Over the last few decades, every state has adopted rules that enable easier sales for in-state breweries. These can include on-premise sales at tasting rooms or at your production facility, self-distribution to local retailers and restaurants, giving samples away at your tasting room, and selling beer to-go from your tasting room. But these permissions almost always only apply to local sales, sometimes limited to just within the county where you’re located. States rarely grant these permissions to out-of-state breweries. Instead, when you begin selling across state borders, your brewery will operate within that state’s three-tier system. In doing so, your brewery can benefit from the services and direct connections that distributors bring to the table.

Interstate beer distribution

Home state permissions, like self-distribution and giving away samples, are almost never available when distributing out-of-state. And this requirement to sell through the three-tier system even applies to incidental sales or attending events. For example, if you want to sell your beer at a festival in a different state, you may have to get a license, register your brands, and get them to the festival through an in-state beer distributor.

Varying State Laws

Similarities and differences among states’ laws

So when you’re selling into a new state, where do you look for the rules? Each state sets up its own alcohol rules, and each state has its own government organization that enforces these rules. These departments—like the California Alcoholic Beverage Control, the New York State Liquor Administration, or the Michigan Liquor Control Commission—are where you should look for the rules and compliance requirements.

On the one hand, there is plenty of commonality among states’ beer distribution rules. They follow a similar pattern, from set-up (licensing and product registration) to implementation (distribution and franchises) to follow-up (reporting and taxes). But no two states’ laws are exactly the same—so even if you have a handle on one state, you’ll still need to learn the particularities of each additional state you enter.

Getting licensed

The first step to beer distribution for any state is to get licensed. You will need to show you have a TTB-issued Brewer’s Notice and a production license from your home state in order to get the beer distribution license.

Similarly, almost every state has a specific license that they require out-of-state beer suppliers to have before the supplier can distribute their beer in that state. So, for every state that you want to distribute in, you’ll need to get another separate license.

If you’re selling into a state without a license, that is a clear and obvious violation, and one that a state will enforce very strictly. And if you subsequently apply for the necessary license, you will need to report that violation, which that state would not take a friendly view of, likely souring your chances to get that license.

As such, it’s critical to understand all the licensing requirements before entering a new state. While getting an out-of-state supplier’s license is not the most complex process (at least compared to getting your Brewer’s Notice), it can still be difficult and time-consuming since it can require providing a state with a lot of personal and corporate information.

Licensing watch-outs

It’s crucial you make sure you’re getting the right license. Every state calls their supplier license something different, and it can be easy to accidentally use the wrong form or check the wrong box. Make sure to review the state rules and see what is the appropriate license for out-of-state businesses and what permits the sale of beer to in-state distributors.

Similarly, you may not see an available license. Alaska and D.C. do not require you to have a license to sell to local distributors—you still need to abide by their three-tier system, but you can engage with distributors without a license. Florida also does not mandate a specific license, though you still need to register with the state as the Primary American Source of your brand/labels.

And New York and New Jersey do not even offer an out-of-state supplier license. Instead, the only available license in these states is to become an in-state distributor, which can be very complex and costly (hint: it requires having a business headquarters in the state; so many out-of-state brewers instead find a New York or New Jersey wholesaler to act as an authorized brand dealer in their respective state).

Every state calls their supplier license something different, and it can be easy to accidentally use the wrong form or check the wrong box.

Product Registrations

Getting COLAs from the TTB

Product registrations begin at the federal level with obtaining a COLA (Certificate of Label Approval) from the Trade and Tax Bureau (TTB). Many small breweries may be unaware of this requirement, as COLAs are not required for the sale of beer that is sold solely within the borders of the state where it was produced. But once you start selling across state borders, it becomes an interstate sale which kicks in federal labeling rules.

Applying for a COLA can be done online, which the TTB will review within a week or two. TTB agents will thoroughly vet your labels for all required and prohibited information and approve them, or send them back for correction if they see anything out of place—which does happen about half the time. Having to resubmit a COLA application, often for something minor like improperly stating the volume size, can create a lengthy and hard-to-track process—editing and resending labels multiple times. To minimize these delays, research label requirements ahead of time or use an automated solution to track and submit registrations.

State product registrations and price posting

In addition to federal registrations, almost every state has its own product registration requirements to ensure 1) that they know what products are being sold through state-compliant distributors and 2) that they are properly labeled.

An aftereffect to product registrations is price posting. This helps ensure fair dealings and not favoring any one distributor. Where present, these price posting rules require you to regularly provide your listed prices to the state and give the state and your distributors a warning of price changes, which can restrict when a price change can become effective.

Product watch-outs

The TTB requires a lot of specific information in a specific format for label submissions, so frequent non- compliance results in rejections and send-backs. To avoid these delays, use tools like LabelVision and the TTB’s Beer Beverage Alcohol Manual (BAM) before submitting.

Some states are rather easy when it comes to registrations, merely requiring getting a copy of your COLAs. Other states are very complex and will do their own multi-week review of your labels. Often states also require the submission of supporting documents, like distributor territory assignments, authorization notices, and laboratory analyses.
sovos.com/shipcompliant

Distributor relationships

Distributor relationships are essential both for instate and interstate market access as they can be key allies in brand ambassadorship, advertising to retailers and engaging consumers. But, it’s also important to acknowledge that your beer is not the only one they sell. So it’s critical to have a solid, clear contractual agreement with your distributor(s) setting out clear and trackable expectations. In addition, you should see what you can do to support them and help them sell your products.

However, many states set out restrictions on where and how your distributor arrangements may operate. These can limit you to work with a single distributor in the entire state or perhaps one distributor in a given territory or just one distributor per brand. These agreements will need to be documented and likely shared with the state so they can police them.

It is also extremely important to recognize state franchise rules. These laws restrict your ability to terminate or renegotiate your existing distributor agreements. They can require you to provide clear, documented proof of good cause when you want to adjust or cancel an agreement, and can even limit what is defined as “good cause.” They can require you to give your distributor months to correct any problems, and even then not allow you to cancel. In a word, these franchise rules can lock you into a bad relationship with a distributor that doesn’t give your products the care and attention you want. Recognizing where these franchise rules exist and getting ahead of them by establishing clear and followable distributor agreements in written contracts is critical to avoid greater problems down the road.

Taxes and Reporting for Beer Distribution

Excise taxes

Taxes are a large part of alcohol sales at both the federal and state level. As a brewery, you pay taxes on your production to both the TTB and your home state, but your interstate beer distributions are also taxed by every state you sell into. Generally, these excise taxes are paid by “the first party to own the product in that state,” meaning your distributor. However, there are a few exceptions (Wisconsin and Ohio for two) where you as the out-of-state supplier will need to remit to the state the appropriate tax money based on the volume of product you sold there.

It’s also important to note—something that even larger breweries forget—that you should not pay excise taxes to your home state on beer that you distribute out-of-state. As such, your exports and interstate sales should be deducted from your total local production so you only pay home state excise taxes on your beer that is actually consumed in your home state.

Shipping reports

Beyond excise taxes there are general shipping reports to file. Almost every state that you ship into will require you to provide follow up reports indicating what you sold into the state, when, and to whom. This is how the state verifies their tax collections from distributors. These reports can range from very simple, like a single statement on total volume, to more complex, like a thorough summary of all your invoices in a given period of time.

Direct-to-Consumer Shipping

The direct-to-consumer (DtC) shipping of beer is a developing topic with growing interest. DtC shipping of beer—where consumers purchase it over the internet or at a taproom and then the order is fulfilled through a service like FedEx or UPS—is generally not allowed. Currently only Alaska, Nebraska, Nevada, New Hampshire, North Dakota, Ohio, Pennsylvania*, Oregon, Vermont, Virginia and Washington, D.C. allow interstate DtC beer shipping. (*Pennsylvania will only issue a DtC beer shipping license to businesses that hold a wholesaler or off-premises retail license in their home state.)

However, the temporary COVID-19 relaxations have brought a new look to these rules, and questions whether states might adjust them. Several states have issued emergency provisions allowing local DtC shipping of beer (actually, these provisions don’t “allow” such shipments, but they indicate the state will not prosecute local brewers who violate otherwise effective prohibitions during the emergency). But these are temporary provisions, and making them permanent will require each state’s legislature to change their statutes. And once these laws are amended, breweries will need to abide by the rules that govern DtC shipping of wine—like licensing, shipping volume limits, expanded tax requirements, and using specific shipping services.

The Importance of Compliance for Beer Distribution

Consider compliance with federal and state laws the baseline of success. Failure to follow federal and state beverage alcohol regulations can have a variety of consequences—most commonly monetary penalties, but in severe situations it can lead to a loss of license.

Penalties and other unwanted consequences

Not prioritizing compliance can quickly snowball into numerous consequences. For example, delayed licensing or product registrations due to an incorrect filing can mean having to hold off on future sales, hindering your growth. It can be quite costly to have your production team, sales department, and everyone else held up because you need another few weeks to get a COLA.

Fines are a relatively common penalty that states and the TTB are imposing on brewers who violate the rules. While many recent high-profile fines have focused on trade practice violations, a fine of a few thousand or tens of thousands of dollars for repeatedly selling without registering a brand/label would not be unthinkable.

While extreme, the loss of a license is another potential consequence. If you lose a license, you’ll forfeit all permissions associated with that license. Losses of licenses can compound on each other, so if you have a history of violations and losing licenses in other states, that could be reason for your home state to take away your production license—meaning you would have to close down all operations. That history will also severely restrict your ability to get future licenses (it will reflect poorly on your background checks). So, while these penalties may not have the vigor of jail time, they could easily lead to a premature exit for you from the beer industry if not careful.

Consider compliance with federal and state laws the baseline of success.

Protect yourself with information

There is a lot of growth and opportunity in the market for those who want to expand their beer distribution. But, before entering it’s important to evaluate your brewery’s current operations, future goals and financial abilities.

Expanding into new markets can be an exciting time, but there are a lot of rules and nuances that could impede a brewery’s development. Knowing the rules when it comes to distribution permissions, distributor relationships, state laws, licensing requirements, product registrations, taxes and reporting, and compliance is crucial to success. Protect yourself and your brewery’s operations by remaining informed and compliant during expansion.

Sovos ShipCompliant helps breweries manage three-tier and direct-to-consumer compliance risk.

Learn How

Direct-to-Consumer Shippers and Sales Tax: What You Need to Know

An ebook for DtC shippers of beverage alcohol

Direct-to-Consumer (DtC) Shippers and Sales Tax: What You Need to Know

For DtC shippers of beverage alcohol — including wine, beer and spirits — managing sales tax obligations across jurisdictions can be quite difficult since rules, regulations, filing requirements and reporting timelines vary significantly state by state.

Sales tax is uniquely complex in the United States. It can be applied at every jurisdictional level: state, city, county and district — but without rate uniformity. This means that there is a lot to know about sales tax in order to compliantly ship alcohol DtC.

How to stay on top of it all? This resource details everything you need to know about sales tax in order to remain in compliance when shipping alcohol to consumers across state lines, avoiding the risk of fines and other penalties, such as loss of licensure that can be devastating to your business.

Download the free ebook now

Download this ebook for a deep dive on the following topics of interest to all DtC shippers:

What is sales tax?
What are situs and nexus?
Dakota v. Wayfair, economic nexus thresholds, and marketplace facilitators
What are the sales tax compliance requirements for DtC sellers?
Special concerns for beverage alcohol companies selling DtC
How direct shippers can manage their numerous, complex sales tax obligations

Compounding the intricacy of the sales tax landscape for DtC shippers, almost everything is subject to change at any time. States are not always diligent in alerting taxpayers to changes in rates, forms and/or rules that might affect them. All of these factors can make it seem overwhelming to manage sales tax.

This ebook will guide you in how to think about managing the multiple essentials of sales tax compliance, from collecting to remitting the correct tax, down to the street level — including accounting for all the special rules, markups and regulations applied by different jurisdictions all across the country.

Successfully shipping liquor, beer and wine to consumers across states lines involves successful sales tax compliance. Download this ebook now to ensure your business is set up for success.

Businesses are constantly looking to evolve and expand, and this is no different in the beverage alcohol space. However, this is a more heavily regulated industry than most others, which makes bringing new products to the marketplace a unique challenge for a brewery.

In addition to the standard logistical issues businesses face like market analyses, licensing, and distribution, a brewery also has to cope with a bevy of regulations from the federal government, state governments, and, in some places, even local jurisdictions. Compliance can be tricky for companies in any space, but it is an especially difficult aspect of selling alcoholic products in the U.S. because of the murky regulatory landscape.

But, never fear! Everyone struggles with expanding their footprint, to some extent. These are natural growing pains, and it’s best to embrace them. In that spirit, we’ve put together a guide for beer producers looking to introduce new products to market and widen their distribution networks: 10 Steps to Expanding Your Brewery.

10-key-steps-to-expanding-your-brewery's-footprint

1. Know Your Brewery

What does your internal team look like? Is it equipped to handle an influx of new responsibilities and obligations? Are you prepared to meet each state’s requirements for registration? Do you have the financial resources? The key to successfully entering new regions is to have everything in place before entering new markets. Identifying openings in the market is important, but you also have to identify your own capabilities before making moves, and then identify the right time to do so.

Speaking of identifying openings in the market – you need to consider the state of the market. Keep an eye on what’s trending right now, and maintain a close watch on newer products that could possibly explode onto the scene. To expand your footprint, your brewery needs to have products that both reflect what’s currently popular and also are different enough from everyone else that you can stand out from the crowd.

Are your products diversified enough from what everyone else is offering in a certain region? What are the top-selling beer types and brands there? How did your beer perform at regional events? A comprehensive grasp of the markets you intend to enter is critical to the success of your expansion campaign, so you should be sure to follow those markets for quite a while before making a commitment to them.

3. Know Your Brand Story

Every business needs to know how to sell its products, but half the battle is figuring out how to sell the brand itself. Not only are you competing with hundreds – and, depending on the product, possibly thousands – of like-minded brewers for shelf space in stores or bars; you’re also selling to a consumer base that can be influenced by the visual design of your products. You’ll need to distinguish your story from everyone else’s – many breweries today cultivate an image reflecting their “passion” for beer. How can you put a unique and personal twist on that?

Maintaining a positive image surrounding your brewery, winery, or distillery is crucial to attracting buyers. This can be achieved via aesthetically appealing packaging, an emotionally compelling brand story, and even a unique value proposition like a beer crafted with an uncommon ingredient or collaboration with another company. Does your brand effectively tell your story and convey a positive message to your audience?

The most important part of any brewery expansion strategy: Understanding your audience. First and foremost, you need to identify which demographics are most likely to buy your products. Where do they live? How old are they? What are they looking for in a wine, beer, or spirit? What other brands do they currently buy?

Once you figure out what motivates your consumers to buy certain alcoholic beverages, you can begin speaking their language. If you’re trying to introduce locally successful products to a new region, learn about the audience in that area and appeal to their interests. A product that resonates with the locals and sells well in, say, San Diego might not have the same impact in Tennessee.

5. Know Your Strategy

Expanding into new territories is an exciting prospect – but it also needs to be meticulously planned in advance. There are many examples around the industry of alcohol producers attempting to grow too quickly, and being forced to scale back their operations as a result. You need to figure out your distribution strategy in each new area you intend to enter, but you also need to refine your sales pitch so you can hit the ground running once you enter these markets.

Will you sell your beer in bottles, cans, growlers, or some combination of the above? Are you going to approach local markets with individually designed plans? Will you take a more broad regional strategy? Or do you plan to target a national audience and use the same messaging and product placement in every market you enter? Each of these approaches has worked in the past, but you have to commit to the strategy once you determine which route you plan to go.

6. Sort Out Your Logistics

Distributors are in many ways the lifeblood of the bev alc industry, so don’t take your dealings with them lightly. Ensure they will care for your products and be upfront with the them regarding the time and resources you need. Verify that your products fit in with their sales model and establish clear goals that you can use to measure success (and write those down in your contract). Taking the time upfront to check that your distributors are set to meet your needs can save a lot of headache down the road.

So, how can you form a positive business relationship with a distributor?

Good question! First, you have to prove your products are valuable. What do your sales figures look like? Are you producing varieties of drinks that are popular enough to sell in new areas? Once you demonstrate to distributors that your brand has a worthwhile product (or products), you can begin to attract attention. Certain distributors will be a better fit than others based on your expansion strategy, so it’s important to choose one that aligns well with your efforts based on regional infrastructure, shipping capabilities, and localized networks.

Next comes the “fun” part: Negotiation. You can easily be trapped in a bad deal if you aren’t careful and sign a formulaic contract. If a states has franchise laws, that can make getting out of a bad deal even harder. Hire a lawyer who will help you draft and clear and enforceable contract. A legal advisor experienced with beverage alcohol can negotiate on your behalf to strike the best possible deal and avoid future problems.

Another key component is establishing good partner relationships. If your brand managers, ambassadors, and solicitors (or anyone else representing you) develop a positive rapport with your partners, they may be more likely to help promote your brand.

Your brewery is very close to being ready to enter new markets now! This means it’s time to obtain all the correct licenses and registrations you need to legally distribute your brews in new regions. Each state has its own unique requirements and you’ll be responsible for knowing when and what you need to do to ensure you register properly and are in compliance. Between excise taxes, shipping reports, licenses, registrations, price posting, Certificates of Label Approval (COLAs), compliance for a brewery can be complex.

If this seems overwhelming, Sovos ShipCompliant can help your business obtain all the necessary licenses and registrations with our Market Ready solution. Learn more about Market Ready.

Once you acquire the licenses and registrations you need to operate in new areas, you need to make sure you stay on top of compliance. This means regularly paying taxes and filing shipping reports, but it also means being proactive. Track your data and measure the performance of your brewery periodically – are you meeting goals and expectations? What is and is not working with your compliance processes? Are you in good standing with each state where you have sales?

Getting behind on state filings can put your business at risk of incurring penalties and interest, or even worse: Potentially losing the license to sell your products in states where you are not in compliance. Sovos ShipCompliant’s 3-Tier Reporting solution can help you stay on top of revisions, license renewals, and any other challenges you may have.

You’ve tackled your brewery expansion successfully and have moved your products into new markets. Congratulations! But you aren’t done – now it’s time to measure your successes, learn from any mistakes you’ve made, and get right back to planning for further expansion. This might mean moving into even more new regions, or it could mean expanding your product lines and increasing product diversity.

Are you in a position to introduce new beers or other products to the market? Are you ready to take the next step toward being a nationally recognized brewery? Are you positioning yourself to be acquired by a larger brand, or to make an acquisition to grow your own brand?

Whatever route you choose to take, you have the tools to go out and conquer the world...or, at least the beverage alcohol industry.

In addition to a winery's standard logistical issues like market analyses, licensing, and distribution, wine producers also have to cope with a bevy of regulations from the federal government, state governments, and, in some places, even local jurisdictions. Compliance can be tricky for companies in any space, but it is an especially difficult aspect of selling alcoholic products in the U.S. because of the murky regulatory landscape.

But, never fear! Everyone struggles with expanding their footprint, to some extent. These are natural growing pains, and it’s best to embrace them. In that spirit, we’ve put together a guide for wine producers looking to introduce new products to market and widen their distribution networks: 10 Key Steps to Expanding Your Winery’s Footprint. These are by no means in chronological order; every winery’s timeline may differ.

10-key-steps-to-expanding-your-winery's-footprint

1. Know Your Winery

Before you launch a new product or expand your presence into new areas, it’s imperative to have a complete understanding of your company’s ability to successfully complete the registration process and meet all unique compliance requirements in each area. It’s also important to make sure you don’t overextend yourself at first – focus on a small number of products you think will perform the best, and then expand your offerings from there.

Some questions to ask yourself: What does your internal team look like? Is it equipped to handle an influx of new responsibilities and obligations? Are you prepared to meet each state’s requirements for registration?

The key to successfully entering new regions is to have everything in place before entering a market. Identifying openings in the market is important, but you also have to identify your own capabilities before making moves, and then identify the right time to do so.

Speaking of identifying openings in the market, the second thing to consider should be the state of the market. Keep an eye on what’s trending right now, and maintain a close watch on newer products that could possibly explode onto the scene in the coming years. To expand your footprint, you need to have products that both reflect what’s currently popular and also are different enough from everyone else that you can stand out from the crowd.

Are your products diversified enough from what everyone else is offering in a certain area? What are the top-selling varietals of wine? How have your product categories been performing there over the past several years, and what are their projections? Having a 90+ rating or score can help catapult you into the limelight, but if you don’t make the list, don’t fret. Use data to make decisions to improve your performance.

Pay attention to demographics and what’s trending in any new areas you hope to enter. Resources like our annual Direct-to-Consumer Wine Shipping Report can help you stay on top of recent trends and identify the right products to introduce to each new targeted region.

A comprehensive grasp of the markets you intend to enter is critical to the success of your expansion campaign, so you should be sure to follow those markets for quite a while before making a commitment to them.

3. Know Your Brand Story

Every business needs to know how to sell its products, but half the battle is figuring out how to sell the brand itself. Not only are you competing with hundreds – and, depending on the product, possibly thousands – of like-minded alcohol producers for shelf space in stores or bars; you’re also selling to a consumer base that can be influenced by the visual design of your products, varietal, or region in which your wine is produced.

Maintaining a your winery's positive image is crucial to attracting buyers. This can be achieved via aesthetically appealing packaging, an emotionally compelling brand story, or even a unique value proposition like the experience at a wine dinner or your tasting room. Does your brand effectively tell your story and convey a positive message to your audience? Once you have your brand story identified, make sure it goes to the right audience.

The most important part of any expansion strategy: Understanding your audience. First and foremost, you need to identify which demographics are most likely to buy your products. Where do they live? How old are they? What are they looking for in a wine, beer, or spirit? What other brands do they currently buy from?

Once you figure out what motivates your consumers to buy certain alcoholic beverages, you can begin speaking their language. If you’re trying to introduce locally successful products to a new region, learn about the audience in that area and appeal to their interests. For example, if Pinot Noir is more popular than usual in your newly targeted market, start by promoting that varietal to gain a foothold.

5. Know Your Winery's Strategy

Expanding into new territories is an exciting prospect – but it also needs to be meticulously planned in advance. There are many examples around the industry of alcohol producers attempting to grow too quickly and being forced to scale back their operations as a result. You need to figure out your distribution strategy in each new area you intend to enter, but you also need to refine your sales pitch so you can hit the ground running once you enter these markets.

Are you going to approach local markets with individually designed plans? Will you take a more broad regional strategy? Or do you plan to target a national audience and use the same messaging and product placement in every market you enter? Each of these approaches has worked in the past, but you have to commit to the strategy once you determine which route you plan to go.

6. Sort Out Your Logistics

Ok, so you have your product strategy in place. Now you need to make sure you can go out and execute on it. This means getting your logistics sorted out, from supply lines to infrastructure. These factors will vary by area and by the types of wines you sell, so it’s important to understand the ins and outs of each place and product.

While you can’t really control how quickly you produce your wine, you can still take proactive steps to make sure everything is in place when you’re ready to begin distributing. Finalize your winery's artwork, bottles, corks, and all the other little things that could cause headaches later down the line.

Once you get your supply chain in place, you can start selling products in new areas and leveraging distributors to help expand your reach.

So, how can you form a positive business relationship with a distributor?

If you have your licenses and registrations in place, it’s time become compliant in every new market you intend to enter. Each state has its own unique requirements – though many are similar – and you’ll be responsible for knowing when and what you need to do to ensure you register properly and are in compliance. Between excise taxes, shipping reports, licenses, registrations, price posting, Certificates of Label Approval (COLAs), your winery's compliance can be complicated and complex.

If this seems overwhelming, Sovos ShipCompliant can help your business obtain all the necessary licenses and registrations with our Market Ready solution. Learn more about Market Ready.

Once you acquire the licenses and registrations you need to operate in new areas, you need to make sure you stay on top of compliance. This means regularly paying taxes and filing shipping reports, but it also means being proactive. Track your data and measure your performance periodically – are you meeting goals and expectations? What is and is not working with your compliance processes? Are you in good standing with each state where you have sales?

Getting behind on registrations and taxes can put your business at risk of incurring penalties and interest, or even worse: Potentially losing the license to sell your products in states where you are not in compliance. Sovos ShipCompliant’s 3-Tier Reporting solution can help you stay on top of revisions, license renewals, and any other challenges you may have.

You’ve tackled expansion successfully and have moved your products into new markets. Congratulations! But you aren’t done – now it’s time to measure your successes, learn from any mistakes you’ve made, and get right back to planning for further expansion. This might mean moving into even more new regions, or it could mean expanding your product lines and increasing product diversity.

Are you in a position to introduce new wines or even take on new product types to the market? Are you ready to take the next step toward being a nationally recognized producer? Are you positioning yourself to be acquired by a larger brand, or to make an acquisition to grow your own brand?

Whatever route you choose to take, you have the tools to go out and conquer the world...or, at least the beverage alcohol industry.

Video: 4 Steps to Get Started Shipping DtC

Direct-to-consumer (DtC) shipping of beverage alcohol products is a $3 billion dollar market that continues to grow annually. DtC shipping can be a great way to grow your business by reaching new audiences, expanding your customer base, and increasing your sales. But, before you can take advantage of this growing market, there are some steps your business needs to take in order to remain compliant and avoid state penalties and fines.

Here is a four step guide to getting started shipping DtC:

Starting your DtC operations doesn’t have to be overwhelming. Following this guide as a starting point can help you simplify and manage the process of getting licensed to ship DtC, allowing you to take advantage of this growing market and get your products in the hands of more customers.

Want to know even more? Get in touch with an expert.

Infographic: 4 Essential Traits to Look for in Your Compliance Partner

Infographic: Address Validation for DtC Shippers