Reprinted from Craft Brewing business,writer of Kary Shumway
Beer distributors have been selling brand distribution rights and realizing tremendous gains for decades. Why should they have all the fun? As the name implies, brand distribution rights are rights granted to sell certain beer brands in specific territories. These rights are created by a contract between brewer and distributor. The brewer grants the distributor the right to sell and distribute their brands, and the distributor sells, delivers and services the products.
While these rights are typically assigned to the traditional beer distributor, the rise of self-distributing breweries has created a new path to value for breweries. Thanks to franchise laws and high demand from buyers, brand distribution rights can be extremely valuable. Craft breweries self-distribute their own beer for many reasons. Control, trying to establish a separate business line or profit center, or they just don’t want to be stuck with the traditional beer distributor.
However, a huge benefit of self-distribution is the ability to create, grow and sell brand distribution rights. In this post, we’ll review the basics of franchise laws, the value of distribution rights and what this all means to your craft brewery. The distribution landscape has changed and there is a lot of money at stake. Read on to see how you can get in on the action and create a valuable asset for your brewery.