Ready to try something new?
By Tracy Jong
Have you ever wanted to explore a new product or market without tarnishing your existing product line and marketing positioning? There are several ways you can do this. Let’s explore some scenarios.
Contract manufacturing
You can file an assumed (fictitious name) for your existing business to create a new and independent brand identity you can work with another craft beverage producer to produce a batch for you and have it bottled under the second brand. You can test the waters and consumer reactions. Contract manufacturing is especially advantageous for New York farm producers because they can do tastings and retail other New York labelled alcoholic beverage products. Thus, a farm brewer who wanted to experiment with cider or bourbon could have it made and bottled by another licensed farm producer. (In this case, the other producer would file an assumed name and use it under license from you as the brand owner.) While not the actual producer, the products can be sold at your retail location and satisfy that desire to try something new.
Alternating premises
Some New York farm brewers want to use non-New York ingredients for some batches but also want to leverage the advantages of the farm brewery license. Did you know a brewery can do both? It is possible to have two licenses (a manufacturing and a farm brewing) at a single location by using an alternating premises. In that business model, the brewery is used on some days under one license and other days under the second license. Separate record keeping is required for each separate business/license but it opens the door to having your cake and eating it too.
Multiple assumed names
A craft beverage producer may have several brands under a single license. This allows you to take advantage of different segments of the market. For example, there could be a brand with an irreverent personality, one with a sweeter taste profile, a premium product…get the picture? Different brand personalities for different customer bases and a way to experiment without affecting your bread and butter products.
Alternating proprietorship
Craft beverage producers can also have two licenses under different ownership at the same premises. This is the perfect way for a start-up craft beverage manufacturer to launch without the expense of infrastructure and real estate. It allows an existing manufacturer to create a small revenue stream and use its excess capacity. In an alternating proprietorship one company is in control of the shared portion of the premises per day, alternating as agreed. This provides an opportunity to collaborate and do something in addition to your signature product. You may create a specialty line that has different ownership than your primary business. For example, a celebrity wants to lend his or her name to a product and wants revenue sharing to do so. This structure accommodates that business model.
If any of these scenarios interest you, contact your craft beverage legal advisor to strategize and minimize risk. Most of all, do what you love to do and have fun trying something new. New opportunities may be revealed.
Legal issues, regulatory applications, reports, audits and business disputes usually aren’t profit-generating activities but not addressing them timely, correctly and effectively can put a company out of business.
About Tracy Jong
Tracy Jong has been an attorney for more than 20 years, representing restaurants, bars, and craft beverage manufacturers in a wide array of legal matters. She is also a licensed patent attorney.
Her book Everything You Need To Know About Obtaining and Maintaining a New York Retail Liquor License: The Definitive Guide to Navigating the State Liquor Authority will be available next month on Amazon.com as a softcover and Kindle e-book.
Her legal column is available in The Equipped Brewer, a publication giving business advice, trends, and vendor reviews to help craft breweries, cideries, distilleries and wineries build brands and succeed financially.
She also maintains a website and blog with practical information on legal and business issues affecting the industry. Follow her, sign up for her free firm app or monthly newsletter.
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Tracy Jong Law Firm