The COVID-19 pandemic has made the US a challenging market for small brand owners in 2020, and as a result, some of them are looking to the UK as a way to diversify their geographic footprint and continue increasing sales.
However, the UK is going through its own set of challenges. “It’s pretty bad news at the moment,” said Michael Vachon, Co-Founder of Maverick Drinks, a craft spirits distributor in the UK. But there are some bright spots and opportunities for brand owners who are playing the long game.
The State of the UK
Many of the issues the industry is facing are a result of the COVID-19 pandemic and the US tariffs. Vachon predicts the on-premise experience will not be back to normal until at least the beginning of 2021.
In addition, it is challenging for brands to come to the EU given the US tariffs are at 25%. If American brands intend to sell in Europe, in most cases they will be forced to combat the tariffs with unnecessarily high prices.
Reasons to be Optimistic
Similar to the United States, the UK has been seeing a large uptake in e-commerce. Amazon has been a massive spirits provider throughout Europe. Furthermore, the UK allows brands with DTC opportunities given there are no laws requiring a distributor.Studies from Mckinsey have shown that in the British e-market, there has been more interest from consumers in trying new beverages.
Tips for Entering The UK
Below are some tips for preparing to enter the UK market.
- Review packaging and labels – Spirits should be produced in 700 ml bottles, which is standard law in most European nations.
- Do your homework – The UK is a very difficult and competitive region to enter and it may be beneficial to consider starting up in a neighboring country.
- Plan your entry strategy – Make sure that your vision aligns with the recommendations of the consultants.
- Reach out to the right people – Publishers can help a brand gain momentum with their target audience.
- Get noticed – Enter your product into awards ceremonies in order to increase anticipation for a product that is an internationally recognised beverage.
- Start the conversations – Find out what Distributors are looking for in the new year and adjust accordingly.