California recently passed regulations that ban any detectable quantity of THC from consumable hemp products such as beverages, food, and dietary products to protect youth and mitigate the risk of adverse health effects. No surprise, there was widespread panic within the hemp beverage industry. I’m not a lawyer, or even a hemp beverage manufacturer, but it’s very clear that no matter what ends up happening in California, this is just one of many legal hurdles this industry faces.
State regulations within the hemp beverage industry have really put a spotlight on the importance of having diversified sales channels. Now more than ever, companies should have a multi-channel system in place, to hedge against the risk of any potential threat to any one channel. Direct to Consumer (DTC) shipping is one good way to diversify. If Covid taught the beverage industry one thing, it was the importance of having a reliable and sustainable DTC shipping system in place.
Although the importance of the traditional beverage distribution system is well understood, this archaic 3 tier system is simply out of date. Consumers want purchasing options, now more than ever. Many feel more comfortable ordering online, even if hemp infused drinks are available on store shelves. It’s not just hemp beverages either, it’s beer, wine, and many RTD and functional drinks.
Beverage companies who do not have a reliable and sustainable DTC program in place, are at a serious disadvantage, and are making themselves overly exposed to potentially harmful distribution variables. Companies who are relying solely on the traditional 3 system are simply out of touch with reality. They aren’t focusing on the customer, and their current buying habits. These companies are the ones that all have the same excuses. Below are some of those excuses, along with reasons why they have not merit.
“Liquid is heavy and expensive to ship.” Solution – simply price your products accordingly.
“Kids will get their hands on it if it’s shipped.” Solution – there are many direct to consumer age verification methods and services.
“We’ll lose money on damaged product.” Solution – use Whale Pods.
“I’m not familiar with state shipping laws” Solution – companies like SOVOS Ship Compliant will help with alcohol, and professional groups like the Cannabis Beverage Association and Hemp Beverage Alliance are great resources for state regulation information.
I’m not here to tell you DTC shipping is easy, and will make you loads of money instantly. It takes time and money to set up, and the proper amount of work needs to put into it to make it a successful sales channel. There may be some legal hurdles that you’ll need to navigate. Many state shipping laws are still weird. Don’t worry though, this will get easier. The wine industry figured this out years ago. Nearly all states now permit some form of direct shipping of wine from wineries to consumers.
So, the moral of story here is don’t wait around for the next legal battle to happen. Don’t wait around for the next Covid to happen. Set up your DTC shipping and diversify your sales channels. It will ensure that you have methods to get your products to consumers, and it will protect your business from any unforeseen break down in the traditional (old fashioned) distribution method. Give your customers what they want – choices.
Oh, and also – don’t forget to use the best DTC beverage shipping boxes on planet earth – Whale Pods.
