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How Liquor Sales & Distribution Work

Post author By Sam
Post date May 21, 2025
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How Liquor Sales & Distribution Work: The Basics

The journey of your favorite spirit from distillery to your glass involves several key stages:

Production: Alcohol is produced by distilleries, breweries, or wineries using raw materials like barley, grapes, or sugar3.
Import/Export: For international products, importers and exporters handle customs, compliance, and logistics1.
Wholesaling/Distribution: Distributors purchase in bulk from producers or importers. In the U.S., the three-tier system requires that producers sell only to distributors, who then sell to retailers2.
Retail: Retailers (liquor stores, bars, restaurants, online shops) purchase from distributors and sell to consumers1.

Facts About the Backend

Three-Tier System: This is the backbone of U.S. alcohol distribution, separating producers, distributors, and retailers to prevent monopolies and ensure tax collection2.
Distributor Revenue Streams:
- Sales commissions (percentage of wholesale price)
- Distribution fees (warehousing, transport)
- Volume discounts from suppliers
- Value-added services (inventory management, analytics)1
State-by-State Differences: Some states run their own distribution or retail operations, while others allow private businesses to handle all tiers2.
Major Industry Players: The alcohol value chain includes raw material suppliers, producers, distributors, and vendors (on-premise and off-premise)3.

What’s Happening Now?

Consumer Preferences Are Shifting: Growth in ready-to-drink (RTD) spirits and non-alcoholic beers is disrupting traditional categories. RTDs saw a 30.4% year-over-year growth in 20235.
Distributor Consolidation: As consumer tastes diversify, distributors are merging to offer broader portfolios and streamline operations5.
Tech Transformation: AI, blockchain, and IoT are making supply chains more transparent and efficient, allowing for better inventory management and e-commerce integration6.
Pandemic Impact: Off-premises (retail) sales spiked during COVID-19, but have since normalized as on-premise (bars/restaurants) consumption returns5.

Future of Liquor Sales & Distribution

Digitalization: Expect more online sales, direct-to-consumer models (where legal), and digital marketing for spirits6.
Data-Driven Decisions: AI and machine learning will further optimize logistics, demand forecasting, and customer engagement6.
Sustainability: Pressure is mounting for eco-friendly packaging and greener supply chains.
Regulatory Evolution: Some states may relax the three-tier system, especially for small producers and online sales channels2.

Opinion: The Three-Tier System-Barrier or Backbone?

“The three-tier system has long been criticized for stifling innovation and complicating market entry for small producers. Yet, it remains a crucial framework for ensuring fair competition, tax collection, and responsible sales. As technology and consumer expectations evolve, the industry must find a balance-modernizing regulations to allow for more direct-to-consumer sales and digital innovation, while preserving the safeguards that prevent monopolies and promote public safety. The future belongs to those who can adapt quickly, leverage technology, and build strong relationships across the value chain.”

Resources for Suppliers

TIPS Alcohol Safety Training: Courses on responsible sales and compliance1.
Industry Associations:
- National Alcohol Beverage Control Association (NABCA)
- Distilled Spirits Council of the United States (DISCUS)
Technology Partners: Explore platforms offering inventory management, analytics, and digital marketing6.
Trade Shows & Events: Attend industry expos to network and stay updated on trends1.

Quick Reference: How Alcohol Gets to Market

Stage	Key Players	Main Activities
Production	Distilleries, Breweries	Brewing, distilling, bottling
Import/Export	Importers, Exporters	Compliance, logistics, customs
Distribution	Wholesalers, Distributors	Warehousing, transport, marketing
Retail	Stores, Bars, Restaurants	Sales to consumers

Sources Used

1 TIPS Certification Blog: Understanding the Alcohol Distribution Process
2 Wikipedia: Three-tier system (alcohol distribution)
3 Institute of Alcohol Studies: The Alcohol Industry Overview
4 IWSR: Five Key Trends Shifting the Beverage Alcohol Market in 2025
5 Capstone Partners: Beverage Market Update – August 2024
6 Accelpay: Streamlining Distribution: Tech Advances in Alcohol Fulfillment

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Samuel Anderson

Just Pick Up The Phone 📞 | Joy 🦋 | Empowering individuals through meaningful connections, one person at a time.

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Tags brand development, legal, market testing, scaling, strategy, tariffs

News & Insights

Let’s Talk Jobs

Let’s Talk About Jobs (And Why Networking Matters!)

Sippers,

Let me tell you a little story about job hunting. It’s not just for fresh grads or those in mid-life crises—it can happen to anyone, at any time.

Picture this: I’m sitting down for coffee with a friend, just catching up, when he casually mentions that his company is expanding and looking for new talent. I wasn’t even job hunting, but that little nugget of information got my wheels turning.

Opportunities don’t always come when you’re looking—they can pop up when you least expect them.

That conversation reminded me of something important: it’s not just what you know, but who you know—and who knows you. In today’s market, job openings don’t always get filled by the best resume in the stack; more often, they’re filled through personal connections and referrals.

So, let’s break down why networking matters and how it can fast-track your next career move.

Why Networking is Your Secret Weapon

1. Referral Programs: The Shortcut to Getting Hired

Companies love referrals because they work! A study by Jobvite found that referred candidates are hired 55% faster and 45% more likely to land the job than those applying cold.

Translation? If you have a friend working at a company you’re interested in, ask for that referral! It could put your resume at the top of the pile.

Source: Jobvite, “The Job Seeker Nation Study.”

2. The Hidden Job Market is Real

Not every job opening makes it to LinkedIn or Indeed. Research from LinkedIn shows that 85% of jobs are filled through networking. That means while you’re clicking “Apply” online, someone else is getting hired over a coffee chat.

Source: LinkedIn, “The Power of Networking.”

3. Hiring is a Trust Game

Companies want to reduce risk, and hiring managers naturally feel more confident choosing someone they or their colleagues already trust. A study from Harvard Business Review found that referred candidates tend to be a better cultural fit and perform better in their roles.

So, if a hiring manager has two candidates with similar qualifications, guess who has the edge? The one with the personal connection.

Source: Harvard Business Review, “Why Employee Referrals Work.”

4. Employers Feel More Secure with Referrals

Hiring is expensive, and employers want to get it right. The Society for Human Resource Management (SHRM) found that hiring managers feel more confident in candidates who come recommended because they believe these candidates are more likely to succeed.

That’s why it pays to stay connected!

Source: SHRM, “The Impact of Employee Referrals.”

5. Recruiters: The Middleman You Should Know

Recruitment agencies aren’t just resume pushers; they’re professional matchmakers who often fill roles through their own networks. If you’ve got a recruiter in your circle, stay in touch—they could be your golden ticket.

6. The Diversity Factor: Expanding the Circle

Networking is powerful, but if companies only hire within familiar circles, it can limit diversity. McKinsey’s research shows that diverse teams are more innovative and successful. So, while referrals are great, companies should still think outside their usual hiring bubbles.

Source: McKinsey & Company, “Diversity Wins: How Inclusion Matters.”

7. The Psychology of Connections

People naturally trust those who are like them—it’s human nature. If you can find common ground with a hiring manager (same alma mater, shared interests, mutual connections), you’re already ahead.

How Do You Put This Into Action?

Tell people what you’re looking for. No one can help if they don’t know.
Reconnect with old colleagues, mentors, and industry peers. Even a quick check-in can open doors.
Attend industry events and meetups. Face-to-face interactions still matter.
Follow up!

Need Help Finding Work?

Here are a few resources to help you get started:

🔹 LinkedIn Jobs – Find job postings and connect with recruiters.
🔹 Indeed – Search and apply for jobs across industries.
🔹 Glassdoor – Research companies and check out employee reviews.
🔹 AngelList – Great for startup jobs and networking.
🔹 The Mom Project – Career opportunities for working parents.

Tags legal, tariffs

News & Insights

Tariff Turmoil

How United States, Canada, and Mexico Trade Tensions Are Shaking Up Your Drink Menu

A Better Sip of Trade Wars

As if inflation and supply chain woes weren’t enough, the latest round of tariffs between the U.S., Canada, and Mexico is coming straight for your glass. Whether you’re a whiskey enthusiast, a tequila connoisseur, or just someone who enjoys a casual cocktail, these trade tensions could soon hit your wallet—and your bar menu.

Let’s break it down.

The Shot Heard 'Round
North America

On March 4, 2025, the Trump administration slapped a 25% tariff on Canadian and Mexican imports and an extra 10% on Canadian energy products—citing “extraordinary threats to U.S. national security” under the International Emergency Economic Powers Act (IEEPA).

Not surprisingly, Canada fired back with a 25% tariff on $30 billion worth of U.S. goods, including—you guessed it—alcoholic beverages. Because if there’s one thing politicians know how to do, it’s make a tense situation even more expensive.

Your Bar Tab’s
New Best Friend: Inflation

So, what does this mean for you? In short, get ready to pay more.

According to Yale’s Budget Lab, these tariffs could increase overall prices by 1.0–1.2%, costing the average U.S. household $1,600–$2,000 in 2024 dollars.

And if you love American spirits? Well, Chris Swonger, CEO of the Distilled Spirits Council (DISCUS), put it bluntly: “This aggressive retaliation targeting American spirits is extremely disappointing and counterproductive.”

Provincial Prohibition?

In a surprising move, some Canadian provinces aren’t waiting for federal action.

British Columbia banned U.S. alcohol from Republican states in BC Liquor Stores
Ontario’s LCBO (Liquor Control Board of Ontario) is pulling U.S. brands from shelves

For major American players like Brown-Forman (parent company of Jack Daniel’s), this is a nightmare. If this trend continues, some U.S. distillers could see their biggest international market dry up fast.

Mexico’s Margarita Markup

Mexico hasn’t fully outlined its counter-tariffs yet, but let’s be real: Tequila is a billion-dollar powerhouse in the U.S.. Any disruption could reshape the entire spirits market—especially since tequila just surpassed whiskey as America’s fastest-growing spirits category.

Will American drinkers have to pay a premium for their favorite agave-based spirits? Don’t be shocked if that top-shelf margarita gets even pricier.

Our Take: A Sobering Situation

The alcohol industry is no stranger to challenges, but these tariffs could reshape North American trade in a major way.

For consumers: Expect higher prices, fewer imports, and possibly some unexpected shortages. For producers: This is a wake-up call to diversify, innovate, and rethink sourcing strategies.

But if there’s a silver lining, it’s this: We could see a booming demand for local, craft, and alternative spirits. Maybe it’s time to check out that small-batch distillery in your own backyard.

What's Next?

With tensions escalating, negotiations are still on the table—but don’t expect a quick fix. In the meantime, if your drink of choice is imported, you might want to stock up now.

Because in the world of trade wars, today’s price hike might be tomorrow’s “good old days.”

Cheers to staying ahead of the game!

—Sam

Tags legal, tariffs

How Liquor Sales & Distribution Work: The Basics

What’s Happening Now?

Opinion: The Three-Tier System-Barrier or Backbone?

Resources for Suppliers

Quick Reference: How Alcohol Gets to Market