New York’s evolving regulatory landscape for alcoholic beverages—particularly the emergence of the Brand Owner license concept—has opened the door for entrepreneurs who want to build beverage brands without operating their own manufacturing facilities. This structure is especially attractive to:
- Founders with a trendy RTD or cocktail concept
- Hospitality groups launching packaged products
- Lifestyle or influencer-driven brands
- Marketing companies building beverage extensions of existing brands
Under this model, a product concept is developed by the brand owner and produced under contract by a licensed manufacturer. The finished product is then marketed under the brand owner’s identity and distributed through licensed wholesalers.
But there is a fundamental shift many founders miss: If you don’t make the product yourself, your contracts become your compliance infrastructure.
Brand owners operate like intellectual property companies managing a regulated supply chain, not like traditional beverage manufacturers.
The Biggest Misconception: “The Co-Packer Handles Compliance”
They don’t. A co-packer handles:
- Manufacturing
- Ingredient sourcing
- Production logistics
They do not automatically handle:
- Regulatory ownership
- Formula rights
- Label approvals
- Brand protection
- Label violation liability
Without clear contractual control, brand owners can lose authority over the very product they created.
Why Regulators Care About This Structure
Under the Brand Owner framework:
- The licensed activity and the brand identity are separated
- Multiple entities touch the product
- Regulators must be able to identify who is responsible for what
If responsibility is unclear, enforcement agencies will look to the agreements—and sometimes conclude the structure was never compliant in the first place.
What Brand Owners Must Control From Day One
Before entering any co-packing relationship, the brand owner must determine:
- Who owns the formula
- Who owns label artwork and trade dress
- Who files TTB formula approvals and COLAs
- Who controls regulatory submissions
- Who bears responsibility if something goes wrong
These are not operational questions. They are legal ownership questions.
Coming Next in Part 2
In Part 2, we examine the most overlooked issue in contract manufacturing relationships: ownership of formulas, production know-how, and trade secrets—and how brands accidentally give them away.
If you have any questions about contract manufacturing and brand owner licenses, reach out to Tracy at Tjong@EvansFox.com.
Tracy Jong is a Senior Attorney at Evans Fox LLP with 30 years of experience focusing her practice in business law, intellectual property and licensing for alcohol and cannabis. Tracy Jong is a member of the New York Bar and is a registered attorney at the United States Patent and Trademark Office. She can be reached at Tjong@EvansFox.com.
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The content has been prepared for informational purposes only; it should not be construed as legal advice, does not create or constitute an attorney-client relationship, and readers should not act upon it without seeking professional counsel.