Foreign brands may have certain expectations when entering the U.S. market, but they will soon be faced with several unique realities that can throw a wrench into the process. Ian Burrell, Founder of Equiano Rum, has been through the process himself and, in this video, he shares some of his lessons from entering the U.S. beverage alcohol market. Burrell discusses what he learned about the way the market is regulated, the importance of crafting the right distribution strategy, and the advantages that direct-to-consumer sales provide in the states.
While the U.S. is one country, each state’s unique way of regulating beverage alcohol makes it seem more like 50 markets than one. In this video, Andrew Stewart of Zamora Company USA discusses the importance of understanding the different beverage alcohol markets in the U.S. Stewart touches on the difference between open states, control states, and franchise states, while also highlighting the ways that beverage alcohol is regulated at a federal level by the TTB.
The beverage alcohol direct-to-consumer model played a key role throughout the pandemic. Now, brands are entering the U.S. and utilizing DTC to gain a foothold across the country. In this video, Dan Price, Sales Director at AU Vodka, discusses AU’s story and explains why you should be using e-commerce to expand your route to market. Price touches on the basic e-commerce structure, the importance of the white-label model, and how AU has found success on social media.
Ian Burrell’s Lessons From Entering The U.S. Beverage Alcohol Market
Ian Burrell 0:09
Good afternoon, everyone. My name is Ian Burrell. As well as being the founder of a new brand called Equiano Rum, some of you may know me as the Global Ambassador for the rum category. Basically, what that means is I get to travel around the world, drink loads of rum with many of you and some great people, work with some great brands to help create concepts and tastings, work with some fabulous bartenders, and get paid for doing it! My career advisor never told me about this type of job when I was in school, so I had to make it up myself—that’s how I became the Ambassador of Rum. But that passion and love for the category led me to create my own brand with some business partners. When you create your own brand, you always think it’s going to be the best brand in the world and everyone’s going to love it, but then reality sets in when you find someone who doesn’t like it as much as you thought. It’s all about the ups and downs. The rum company itself is based in the UK, but our liquid is from the beautiful island of Barbados in the Caribbean—which poses some challenges—and the African continent as well.
Ian Burrell 2:12
Preparing for the US market with Equiano Rum involved facing a lot of challenges as a small brand. Our team consists of three members in the UK, one part-time worker in Canada, two people in America, and two part-time brand ambassadors—and that’s it. After the last three years, I want to talk about some of our challenges and successes launching in the States. The first point I always say is: know your market. As Andrew said, America is one of the biggest markets in the world for spirits, and for rum, it’s the biggest behind India in terms of volume. But what style of rum do they like to drink? It’s nice creating a brand, but you have to know if people are going to buy it, drink it, how they’ll see it, and how it compares. You have to understand where you’re going to sell, who you’re selling to, and set the right price points.
Ian Burrell 4:05
When we look at the US from our little office in the UK, we often view it as one country when, in reality, it’s 50 different countries with different rules. When you’re a small company with limited resources and budgets, those are the types of things you can’t make mistakes on, or you lose money very quickly. You also have to manage your expectations. I know a lot of people in the industry, and I felt like I’d just make a rum and everyone would drink it. In reality, it’s a very slow process. Overnight successes often only happen after 10, 15, or 20 years of hard work. Be realistic about how much you’re going to sell and who you’re selling to. If someone wants a whole pallet in a market that doesn’t sell much rum, tell them to start with a couple of cases first instead of letting a pallet sit there gathering dust.
Ian Burrell 6:51
Learn to say no. It’s very hard for a small company to say no when someone says they love your product and story. As a small brand, we are in 14 states after a year and a half. Personally, I think that’s about eight states too many. It sounds brilliant, but is our rum actually selling in all 14 states? In hindsight, I would have loved to go back and tell a couple of states, “No, not yet. Let’s take our time.” Selling in is the easy part; selling out is the hardest part. Furthermore, big distribution is not always good. When I was starting off, getting into massive distributors like Southern Glazer’s or RNDC was seen as the Holy Grail, but big is not always better. Big distributors are facilitators—they buy your stock, but you still need to work the brand yourself, which costs money. My biggest successes in the last year and a half have been with smaller distributors who give us more love and attention.
Ian Burrell 10:04
Having the right sales resources and infrastructure out there is crucial. We were very lucky early on to find an experienced former Pernod Ricard CFO who steered us in the right direction and opened doors for us. Investing in someone who knew the market, the three-tier system, four-tier systems, and control states was a big win for us as a small company. Investment is equally important to help promote and get your product into various markets. Additionally, direct-to-consumer (DTC) was vital—if it wasn’t for DTC during the pandemic, we probably wouldn’t be here. We teamed up with Passion Spirits in the US, which gave us direct online distribution into 40 states, allowing us to build our brand via social media while the on-premise market was closed.
Ian Burrell 12:43
Finally, have patience. This process takes time, and you have to be in it for the long run. If you’re in this just to make a quick buck, don’t do it—do it for the love of the industry. The brands that take their time, do the research, and do their due diligence are the ones that succeed and flourish. We don’t hear about the brands that fail dramatically and burn, only the successes. Take your time, work with the market, and understand the US market step by step. As a company, we are doing quite well, making noise, and winning awards globally. Thank you, everyone—my name is Ian Burrell.
Understanding the Different Beverage Alcohol Markets in the U.S.
Andrew Stewart 0:11
I live in Dallas, Texas. This visual is just to show you scale: this is the state of Texas overlaid to scale over Europe. As Ian alluded to, it is very important to understand that while the USA is one country, it is effectively 50 different markets. Every single state has different nuances. Over the last 20, 30, or even 40 years, those markets—and the country itself—have split into distinct regions. It is not as simple as everyone speaking English from one market; there are regions where three or four different dialects of Spanish are spoken. In Texas, for instance, it is Mexican Spanish. Saying everyone speaks the same language is like saying the English and the Irish speak the same language—and excuse me, I’m Irish, so I know it’s a completely different culture! That cultural nuance is crucial to understand when looking at the size of the country.
Andrew Stewart 1:33
There are four primary steps to growing a brand in the US market: handling the TTB, choosing the right distributor, understanding the markets, and selecting the right launch site. With the TTB, I will go into more detail shortly. When choosing a distributor, make sure you align with partners who suit your strategy, not just theirs. At the end of the day, it’s your brand, not theirs. Distributors will often tell you what you want to hear, but as soon as you walk out the door, they face different commercial pressures. Stay true to who you want to be aligned with. Additionally, you must understand the individual states. Texas alone consists of four distinct sub-markets: Dallas, Houston, Austin, and San Antonio. They are completely different markets within a single state, so plan carefully where you launch. New York and Los Angeles are attractive and high-profile, but they are “pay-to-play” markets and extremely expensive. Unless you have massive capital, start small. Pick markets where you can seed your brand, manage your expectations, and use those initial returns to expand elsewhere.
Andrew Stewart 3:25
To break down the 50 markets: the red states on the map are open markets operating on a standard three-tier system. The dark orange states represent the 17 control states where alcohol distribution is strictly managed by the state government. Everyone wants to target Pennsylvania because it is the largest control state. Once you gain entry there, it often opens doors because other control states follow its lead. However, launching in Pennsylvania can be costly—I launched a brand there that cost $25,000 in the first year just to comply with state entry requirements, such as mandatory tastings, specific store counts, and required magazine advertising. If you miss their sales quotas, they will cut your listing.
Andrew Stewart 5:01
The yellow areas are franchise states, such as New Mexico, Georgia, and parts of the Northeast. Franchise markets offer great potential, but you must be extremely cautious with your contracts. Under franchise laws, the local distributor effectively holds the rights to your brand, making it very difficult to exit the agreement unless you buy your way out or swap brands. For example, with Zamora Company, we have a situation in Georgia and Tennessee where our portfolio is split across different distributors who refuse to trade brands without substantial fees. Beyond that, there are four-tier markets like my home state of Texas and South Carolina. In a four-tier system, the chain goes: Importer/Supplier (us), Wholesale Distributor (such as Southern Glazer’s or RNDC), Local Class B Distributor (a retailer licensed to sell to on-premise venues), and finally the Retailer/Bar. Understanding whether you are dealing with control, franchise, open, or four-tier states is crucial before entering a market.
Andrew Stewart 7:29
In a standard three-tier system, the flow moves from Supplier/Importer to Wholesale Distributor to Retailer/On-Premise venue. In a four-tier state like Texas, the Class B local distributor acts as an intermediary because large wholesalers cannot sell directly to on-premise accounts. Geographically, the US also breaks down into major focus regions: the Northeast, Florida, Texas, and the West Coast (California). When picking distribution partners across these regions, remember that it is okay to say no. Examine a distributor’s existing portfolio on their website to ensure your category aligns with their focus. Be aware that no single distributor offers truly national coverage; even Southern Glazer’s, the largest, operates in about 40 states while other wholesalers cover remaining territories.
Andrew Stewart 9:15
Step number one before anything else is getting approval from the Alcohol and Tobacco Tax and Trade Bureau (TTB), which is tied to the U.S. Department of the Treasury. You must navigate their requirements for licenses, permits, label approvals, and formula reviews. I had a friend with a French gin who got so caught up in their botanicals that when the TTB rejected one specific ingredient as unapproved in the US, the brand stalled completely because they refused to alter the recipe. Whether it’s a specific type of sugar, coloring agent, root, or flower, always have a Plan B for your formulation. The TTB is the ultimate gatekeeper to entering the market.
Andrew Stewart 11:29
The potential in the US market is huge, but you must do your homework and manage your expectations. Do not rush, and do not put all your resources into one basket. When Zamora Company established Zamora USA five years ago, our portfolio was scattered across 15 different distributors and suppliers; it took us four full years to consolidate everything under one entity. Building a brand takes time—George Clooney’s Casamigos was not a three-month overnight success story; it was the result of nearly 20 years of foundational work before the major buyout. Lastly, invest in “feet on the street.” Wholesalers will not build your brand for you; no one can sell your brand better than you can.
Using E-Commerce to Expand Your Route to Market
Dan Price 0:10
I’m a sales director for AU Vodka. Over the last nine or ten months, I’ve started our business in the American market. Similar to all the things the other guys have said, there have been lots of challenges. It’s taking a lot longer than what we probably expected, but we’ve done everything from manufacturing to exporting the product, shipping it, and meeting with all these distributors to try and work out who the best partners are for our business in the short term, mid-term, and long term. So, lots of the guys spoke about different things, so I’ll try and run through this relatively quickly. My presentation today is based more on the direct-to-consumer business, where we’ve had a really strong blueprint across the UK. We’ve been so successful with that, and we’ve been so successful in Europe, too. It’s something that we’ve launched in the last four to six weeks in America, and as we go through the presentation, I’ll show you how we’ve done it and how we’re growing that part of our business.
Dan Price 1:04
This is our brand, Au Vodka. We’re a flavored vodka brand, very similar to the likes of Cîroc and Grey Goose. We’re an ultra-premium brand. All of our flavors are colored, and they’ve really been the success and driving force behind the growth of our business over the last few years. I’ll give a short introduction to who we are and some of our stats. Hopefully, it will make a bit more sense as we move on to the importance of e-commerce and social media platforms, and then we’ll talk through some of the routes to market and how to execute them.
Dan Price 1:33
Similar to what some of the guys have said, our business has blown up over the last couple of years. Everyone thinks that we’re an overnight success, but the founders, Charlie and Jackson, started the business seven years ago with just two thousand bottles. They started off with a single premium vodka and focused heavily on premium venues in the on-trade. Over the last few years, the brand has completely shifted—we are now a heavily off-trade-focused brand, and the founders are still a massive part of the business today. Around three years ago, Charlie Sloth invested in our business, which transformed us into more of a celebrity-backed brand. We really started marketing toward the rap and grime music scenes. Charlie is a world-famous DJ and one of the most prominent in Europe. He runs a platform called Fire in the Booth, where rappers come in and freestyle over his tracks. That platform has given us the opportunity to get our product in front of the right influencers to amplify our brand across social media.
Dan Price 2:31
These are our flavors: Original, Black Grape, Fruit Punch, Blue Raspberry, Green Watermelon, and Red Cherry. The reason I have all of them up here is that as we’ve expanded to the US, we launched with just our Original and Black Grape. In the UK, we found success by seeding new flavors and concepts across our social media platforms to generate buzz. In America, our strategy is to drive as much noise as possible in a targeted area using just two SKUs to start off with. Once we create the demand and hype around those products, that’s when we’ll begin introducing additional flavors.
Dan Price 3:00
To share some numbers: in the last financial year, we sold just over 2.4 million bottles and turned over around £60 million. We are currently the fastest-growing UK spirits brand and the most followed UK spirits brand on Instagram, endorsed by major artists. Across social media, Facebook is strong, Instagram is our largest platform, and we’re also the number one spirits brand in the world on TikTok. This online presence generated 305 million impressions last year, which is crucial for brand visibility. The Spirits Business published an article analyzing engagement across platforms—while heritage brands like Hennessy, Smirnoff, and Cîroc have higher follower counts, our engagement rate (likes, comments, and shares) ranked higher, proving that our audience genuinely interacts with our content.
Dan Price 5:01
Moving on to the route to market: when considering expansion partners, we partnered with RNDC for our on-trade and off-trade distribution. We’re focusing on Georgia, Florida, and Texas with our two initial core products. We are investing heavily in Georgia and the Atlanta market specifically, as the local culture aligns strongly with our brand identity. On the e-commerce side, platforms like Speakeasy, ReserveBar, and Minibar allow us to ship to 40 different states. There are three primary digital models: the white-label model (via Speakeasy or Passion Spirits), the marketplace model (like ReserveBar, which functions like Amazon for thousands of spirits), and on-demand delivery services (like Minibar or Instacart) that deliver within 30 minutes in cities like LA and Las Vegas.
Dan Price 6:16
In my opinion, the white-label model is the most important. It allows you to run your own site—fulfilled and managed by Speakeasy—while maintaining full control of the customer journey from ad click to basket checkout. Merchandise is another massive driver for us: over 60% of our direct-to-consumer orders include branded merchandise like glassware or LED cases. Our white-label setup allows us to ship to 32 states, covering a population of 220 million people, while gathering real-time data to inform our physical retail strategies. In just our first four weeks live in the US using paid and organic campaigns, we generated $120,000 in direct sales and 11 million engagements. Most importantly, the real-time purchasing data tells us exactly where organic demand is building—allowing us to make data-driven decisions on which markets to enter next. It has been one of the smoothest parts of our business to scale internationally.
Free Guide to Getting Started in The US Market
Before launching your brand in the US, make this download your first stop for understanding how the US alcohol system is set up and the initial steps required to begin selling your alcohol product here.