Three product decisions shape a US launch more than any others: format, alcohol by volume (ABV), and price tier. Settle each with your importer before production, because each one is expensive to change afterward.
Format
Choose a format that your wholesale partners can place in the accounts you want to reach. Ask your importer which formats move in grocery, convenience, and on-premise accounts, and whether your packaging meets US shelf and case requirements.
ABV and classification
Production method decides whether a product is a wine or a distilled spirit under US rules. ABV does not. Distilled soju is a distilled spirit at any strength. A soju made from a wine base is classified as wine. Our wine-based soju article shows how much that classification changes which accounts can carry a product.
ABV matters in three ways:
- Label approval. TTB requires a COLA for distilled spirits, for malt beverages, and for wine at 7 percent ABV or more.
- A ceiling. Under TTB rules, a wine contains no more than 24 percent ABV. Above that, the product is no longer classed as wine.
- Tax. Federal excise tax on wine is set in brackets by ABV, so moving across a bracket line changes your cost.
Settle the production method and the ABV together, before you finalize the product.
Price tier and the price stack
Build the price forward from your own price, and check where the shelf price lands. Your price, the importer’s price, the wholesale partner’s price, and the retail price all sit between you and the shopper, along with state taxes.
Here is an illustrative example only. These are not RTM prices and not a forecast. Real figures vary by product, state, and account.
| Step | Illustrative figure |
|---|---|
| Producer price (FOB origin) | $8.00 |
| Freight, duty and federal excise tax (illustrative flat $2.00) | $2.00 |
| Importer margin (20 percent of the $10.00 landed cost) | $2.00 |
| Importer price to the wholesale partner | $12.00 |
| State excise tax (illustrative flat $0.50) | $0.50 |
| Wholesale partner markup (20 percent of $12.50) | $2.50 |
| Price to the retailer | $15.00 |
| Retailer markup (40 percent of $15.00) | $6.00 |
| Shelf price (before sales tax) | $21.00 |
In this example, the shopper pays $21.00 for a product that left the producer at $8.00. The producer price is the one number a producer controls, so a change there moves every row below it. If your target shelf price is $18.00, you must either lower the producer price or accept that the product sits in a higher tier than planned. State excise tax is usually paid at the wholesale level, which is why it sits before the wholesale partner markup in this example. Ask your importer to run this stack for your product and for each state you plan to enter.
Where an importer fits
An importer with wholesale relationships in your target states can test all three decisions against what its wholesale partners are placing. For how RTM Imports handles compliance, see the compliance and licensing page.
To talk through your launch plan without commitment, contact our team through the RTM Imports contact page.