In the alcohol space, many brands choose to engage with a compliance expert rather than handling all the complicated paperwork and operations in-house. It’s not just deciding whether or not to use a compliance company but, more important, when to sign on.
Timing is a major component in when to onboard with a compliance expert. If you start at the wrong time, your company could lose drastic funds. A reputable compliance company will always advise when to engage with their services. Times to perhaps wait before engaging a compliance company for your brand include:
Your label isn’t finalized. For domestic producers, federal law requires the distillery, bottler, or rectifier to apply for the brand’s COLA (the TTB’s Certificate of Label Approval). Therefore a compliance company wouldn’t be of any service to a U.S. brand before its COLA is secured. (International product is an exception here, as compliance companies apply for international brands’ COLAs.) The COLA is a compliance company’s initial “work ticket” for its clients, as it lets the company begin registering the brand in whatever markets the client wishes.
You’re changing manufacturers. This doesn’t mean adding a new product to your company’s offerings but, rather, having a different manufacturer make current product that’s already being sold. Deciding to either overhaul your crush or mash, or to contract with a different or additional manufacturer, means there will be multiple COLAs for the same product. You’ll need to phase new COLAs into already existing markets while also phasing out old COLAs; you may even have multiple registrations in the same state for a single product.
Not having the correct COLA registered could lead to disastrous fulfillment issues with distributors or delayed launch times. If you’re currently changing production (or planning to change production soon), make sure you’re clear before compliance companies start executing for you.
Your sales team isn’t ready. COLAs are finalized and production operations are set, but those two accomplishments don’t necessarily mean you’re ready to hire a compliance company. Your brand needs to secure sales and that means you need to know the target market. Your sales team needs to be focused on pursuing and obtaining the on-brand distributor deals or accounts.
While your team is busy executing sales, the compliance company can go to work and execute fulfilling those orders. Not knowing your target market will hinder your team’s ability to sell and, with no orders, there’s no reason to hire a compliance company. Furthermore, having a stagnant service on your books can lead to wasted funds and, most likely, frustration.
When hiring a compliance company, timing is everything. Responsible compliance companies will not only understand your company’s needs and help you navigate through the complexities of U.S. alcohol regulations, they’ll also ask the right questions to best assess your business stage, give you the information you need—and, possibly, say, “Call us back when XYZ is done and we’ll be ready for you!”
Chelsea Washburn heads the growth department at American Spirits Exchange (ASE), the nation’s foremost compliance and logistic company helping brands grow faster in the U.S. alcohol industry. Contact her at Chelsea@americanspiritsltd.com or (215) 240-6020 x 116.