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Wholesaler is the weak link in wine distribution. | Food & Beverage > Food & Beverage Trade from AllBusiness.com From vehicle maintenance to virtual meetings, here's how to save money on gas and electricity. Proper use of the carrot and the stick can help protect your small business. From overselling to going off topic, don't let these common boo-boos keep you from closing the deal. The weakest link in the chain of distribution from winery to consumer is the wholesaler. There are notable exceptions, of course; but by and large, it's the wholesaler who often makes the difference between success and failure in the distribution of a wine brand. The pages of wine history are littered with brands that have failed because the wholesale link broke-or never was firmly fastened in the first place. This is not to say that good wholesaling alone is enough to put a wine brand over. Far from it. The quality must be there, the packaging must be good, merchandising and sales promotion must be effective, and there must be adequate capital to finance the whole thing, along with certain other essential ingredients. But it is to say that without strong wholesaling, the chances of making the grade are slim even if all of the other ingredients are present. What Makes a Good Wholesaler? What makes a good wine wholesaler, anyway? Well, let's take him apart and see. First and above all, he must be wine-minded. I have yet to hear of a wholesaler doing an outstanding job with wine who doesn't have a genuine interest in the product. (I'm not counting the 1942-46 period when wine sold itself.) Maybe that interest is motivated by the desire for profit, but whatever the motive, the interest is there. He has a feeling for wine; its place in the social scheme of things; its importance in the diet; the good fellowship that it adds to everyday living; the grace and dignity and charm it can impart to human relations. In short, he firmly believes that "wine belongs. " Fancy words? Maybe. But they're all elements of wine-mindedness. And without that, you haven't got a solid foundation for good wine wholesaling. Second, he must have a sound wine-sales program. It isn't enough that he loves wine. He's got to work at selling it. He must have a carefully laid plan of action and then keep hammering away at his objective: more wine sales. I know one exceedingly successful wine wholesaler who has added thousands of cases a year to his volume by getting his key salsmen to make talks and put on wine demonstrations before civic and social clubs. I know another equally successful wine wholesaler who has his salesmen call on newly licensed retailers within days or even hours after they have gotten their licenses. These are but two examples of elements of sound wine wholesaling programs. There are hundreds of other ways to build up sales volume. It all takes planning and hard work. The successful ones do it. Third, the wholesaler must be adequately financed. Ever hear of the fellow who went broke because of too much business? That applies to wine wholesaling, too. You can have a love of wine and a sound sales program, but you've also got to have money: money to finance inventories and overhead; money for good sales personnel; money to promote; and money for the dozens of other things that are essential to successful selling. Money is the food that nourishes and sustains the economic body. Fourth, and finally, he must have good men. The number of men he has isn't nearly as important as how good they are at selling. If he can't find the right kind of men he needs, he trains 'em. I remember one wine wholesaler who had seven salesmen. Two of the seven brought in over half of the business, even though the sales potential of each territory was about equal. So he put the two good ones to work on the other five. Inside of a year, the average business done by each of the five tripled. Many winery owners and managers take their wholesalers for granted. A deal is made, the wholesaler gets the line, credit terms are arranged and the winery man goes on to something else. When the wholesaler doesn't produce all that is expected of him, he hears about it. Then, in due course, comes the break and the line is taken away and given to another wholesaler. Repeat performance. What's wrong? Here's part of what's wrong: The winery owner or manager and the wholesaler are partners. They're a team. One can't do his best without the help of the other - and vice versa. In a very real sense, the wholesaler is the sales department of the winery. (Ask any winery that does its own wholesaling.) The wholesaler needs and must have all of the cooperation the winery can give if he, the wholesaler, is to do a good job. Until the level of effectiveness of wine wholesaling generally is raised to that of the few outstanding ones now in business, the winery is going to have to hold the wholesaler's hand. Limited space prevents more than bare mention here of such important things as regular servicing of retail accounts, building good will by putting up displays, keeping shelves well stocked, bottles dusted and the dozens of other little things that add up to profit-making relations between wholesaler and the trade. The successful wholesalers are doing these things. Copyright © 1999 - 2011 AllBusiness.com, Inc. All rights reserved. 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Wine Distribution Bottleneck « The Wine Economist An Economist Uncorks the World of Wine with 4 comments I have often argued that to really understand an industry you first need to understand where the bottlenecks are in the value chain.? Bottlenecks disrupt the efficient flow of resources and so industries tend to evolve around them.? I believe that this observation holds especially true for wine. Herewith a brief update on the current situation. Do the Math Silicon Valley Bank released their annual State of the Wine Industry Report yesterday.? SVB is a major lender to US wine producers and thus has a strong interest in producing clear, relevant wine economics research. (I also admire the wine economics research produced by the Dutch agricultural lender Rabobank.) The report provides some good news along with many worrisome? observations (click on the link above to download the study) and fresh data on the biggest single bottleneck in the U.S. wine industry — distribution. Here’s the basic math.? SVB estimate that there are 6000 wineries actuve in the US market producing about 7000 wine brands.? All these brands need to squeeze through the U.S. three tier distribution system bottleneck.? This means they need to go from maker (first tier) to state-licensed distributor (second tier) to local retailer (third tier). That’s the law here in the United States,? where we still think of wine as a controlled substance. There are only limited opportunities for producers? to skip a step.? I understand that Bronco Wines, for example, can sell its Charles Shaw brand directly to Trader Joe’s in California because of a legal loophole there, but has to use an independent? distributor in other states. That’s why Two Buck Chuck costs $1.99 in L.A. but $2.99 here in Washington State.? That extra buck is the cost of the extra distribution layer. The Big Squeeze Now we get to the big squeeze. These 7000 brands get funneled through about 550 major distributors according to SVB (obviously this does not count many smaller Mom-and-Pop and specialized distributors that I am familiar with), which is about half as many as a few years back.? Hopefully you can appreciate the bottleneck — 7000 brands worth $30 billion in retail sales have to squeeze? through 550 distributors in 50 states on their way to 76 million wine consumers.? Any blockage in the distributor tier backs up the whole industry. And the problem gets worse because the distributors are obviously getting squeezed themselves by the economy — falling sales, trading down, shrinking margins, credit limits and counter-party risk.? Expect distributors to consolidate in some cases and pull back to reduce cost and risk in others. The net effect is clear — distributors are reducing their SKUs (stock keeping units to non-economists) and focusing a smaller number of? reliably profitable products lines.? This means that it is harder and harder for new and niche wineries to get on the warehouse pallet. The Missing Middle I’m not sure exactly how this all will shake out, but I suspect the problem will be worse in the middle market. Very small wineries can often successful self-distribute.? Very large ones will probably get distribution because of the volumes they can generate.? The middle falls awkwardly in between — too big to sell it all yourself, too small to be worth a major distributor’s time. The fact that the distribution system is fragmented into 50 (plus DC) pieces just makes the situation worse. In the same way, SVB data suggest that lower priced fine wines ($35 and less on their scale — remember that a lot of SVB’s customers are in Napa Valley) are still selling pretty well and very expensive icon wines apparently are doing OK, too.? The mid-range is in trouble.? SVB calls $35-$50 a “gray area” and $50-$125 a “dead zone.” Ouch. I would hate to be a new 3000-5000 case winery trying to sell wine made to be priced in the dead zone.? Unfortunately, I think there may be a lot of new wineries coming on line now who planned to do just that back when economic conditions were sunnier. It will take exceptional effort (or truly exceptional wine) to make this business model work in the current economic environment. I recently talked with one middle-sized premium winemaker who has already figured this out and pulled back — lower output, lower prices — to get clear of the dead zone. This is the “missing middle” effect that economists are familiar with in other contexts (small family operations and huge corporate businesses survive, the middle simply disappears).? The distribution bottleneck isn’t necessarily the cause of the coming missing middle effect in the wine industry, but it will certainly make it worse. Share this: Facebook Email Print Digg Reddit StumbleUpon Written by Mike Veseth May 5, 2009 at 6:48 pm Posted in Charles Shaw, Constellation Brands, Economic impact, Rabobank, Supply and Demand, Trader Joe's, Two Buck Chuck, wine distibution, wine markets, wine spectator Subscribe to comments with RSS. would you consider this as one of the biggest problems in the wine business as of now? chris September 7, 2009 at 6:55 pm The wine business has many problems and distribution bottlenecks are certain near the top of the list. Mike Veseth September 8, 2009 at 4:02 am Thank you! seems like a vague question, but I am doing a research report on wineries, and this has been valuable info. I think I will go purchase one of your books to help with my research. chris September 8, 2009 at 6:53 am I’m curious how price behaves as bottles traverse through the three tier distibution system. For example, if a bottle retails for $25, what did the winemaker sell the bottle for, what did the distributor then sell it for? Given the bottleneck you described and the fact the change happens slowly if at all when ‘controlled substances’ like wine are involved, how much are you seeing the distribution mix of small and medium-sized wineries shift toward direct to consumer models? Good stuff, thanks! Eric November 17, 2010 at 5:28 pm Your email address will not be published. Required fields are marked * Name * Email * Website Comment You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <pre> <del datetime=""> <em> <i> <q cite=""> <strike> <strong> Notify me of follow-up comments via email. Notify me of new posts via email. What do you get when you cross the Wine Spectator, America's best-selling wine magazine, with the Economist, the world's leading business weekly? The answer is this blog, The Wine Economist, which analyzes and interprets today's global wine markets. Send email to Mike@WineEconomist.com Enter your email address to subscribe to this blog and receive notifications of new posts by email. Blog at WordPress.com. Theme: The Journalist v1.9 by Lucian E. Marin.

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Amadeus Wine DistributorsA boutique distribution partner for hand-crafted wines Welcome to Amadeus Wine DistributorsAmadeus Wine Distributors serves the greater Seattle area with exceptional customer service and attention to detail. Currently we represent over 20 wineries from California, Oregon, and Washington. Over the next year we will expand and double our selection.Amadeus Wine Distributors will maintain the model of being a boutique style, privately owned wine distribution and marketing company; committed to providing an exceptional level of service to our sales team, wineries, and buyers.Our selection of small production, hand-crafted wines are chosen because of their excellent price per value and the winemakers’ attention to detail. We will always be a boutique style company and work only with wineries that are compatible with our mission of sharing every wine’s story with buyers and consumers.

Wine Search Online Directory:- Sales > Distributors Wine importer located in Virginia, of premium fine wines from Argentina (English). Read more Wine distributor specializing in small production boutique wines from California, Australia and France, targeted to restaurants and retailers in Florida (English). Read more Wines from Hungary, corks from Portugal (English, Hungarian). Read more Importer of wines from Chile, Argentina and Spain (English). Read more Importer of wines from Chile, Argentina and Spain (English). Read more Wine producer and wholesales of French wines (French, English, German). Read more Louisville, Kentucky based wine/spirits/accessories distributor (English). Read more Celeb-Brands is dedicated to sourcing and managing your wine brands. We currently represent Tommy Lasorda, of baseball fame, wines. We source wines you can put your name on. Read more Importers and marketers of wines from German and Alsace to the USA (English). Read more Importer specializing in from Southwestern France, brandies from Armagnac, Cognac and Calvados (English). Read more Wine distributor based in Toronto, Canada (English). Read more Export in bulk of wines from Beaujolais and Rhone Valley (French, English). Read more Distributor of wines, based in Ecublens, Switzerland (French, German). Read more Information about Bordeaux wine producer and trader (French). Read more Information about Bordeaux wine trader (French, English). Read more Information about wine trader Christopher Cannan. Wines from France, Spain, Portugal, Italy, Hungary. (French). Read more Importer and distributor of spanish wines, Minnesota wholesaler of fine European wines (english). Read more Importer of French wines and Wholesaler of wines from all over the world, US only (English). Read more Importer of wines from around the world into North Carolina and South Carolina, US (English). Read more Complete display and up to date information on the fine wines that we import to the UK. Learn about our producers and retailers (English). Read more Importer, wholesaler, and online retailer of quality European wines (English). Read more Brokers of fine wine, also organizes wine tours in France (English). Read more Traders in french wines (Bordeaux and Bourgogne). Worldwide export (French, English). Read more Bulk trader in wines from Bourgogne area (French, English). Read more A California based distributor of small, artisanal wines from around the globe dedicated to serving fine dining establishments and specialty retailers. Read more MDM Distribution is an importer and wholesaler of wines from Australia, New Zealand, Spain, Argentina, and California (English). Read more MDM Distribution imports and distributes boutique wines from around the world. MDM distributes in California and have a robust National Sales Program. Read more MDM National is committed to providing a full service National (U.S.) distribution program for small to mid-sized wineries. Let us take your brand to market! Read more Importer/Distributor of South Africa wines to the USA, based in Minneapolis, Minnesota (English). Read more Serving fine wine retailers and restaurants in Southern California (English). Read more Rio Joe?s is the leading importer, wholesaler and online retailer of Brazilian wines and cacha?as. We import: Rio Joe?s Silver Cacaca PIZZATO line of wines Read more Distributes a number of Californias wines, based in California, USA (English). Read more Distributes premium wines wines from select vineyards and artisan winemakers to retail stores and restaurants in Pennsylvania and Delaware (English). Read more Importer and Distributor of American, Argentinian and Burgundy wines, based in Vancouver, Canada (English). Read more Wine distributor of selected French Wines in the United States (English). Read more Sales of premium wines with custom labels (English). Read more Export of South Africa wines to the USA, based in in Philadelphia, Pennsylvania (English). Read more Suppliers of wines to the specialists and supermarket groups in Europe (English). Read more Wine exports, based in Germany (German, English). Read more Importer of wine from Romania in the region of the Transylvania Alps, based in Los Angeles, USA (English). Read more

Roanoke Valley Wine Company - Wholesale Wine Distribution in Virginia Contact Information and Trade Links Phone: 540-444-4440Email: order@rvwc.com Links:Wine SpectatorThe Wine AdvocateThe Wine EnthusiastStephen Tanzer's International Wine CellarSante MagazineFood and WineWine and Spirits Magazine Roanoke Valley Wine Company is a family-owned, Virginia-based importer and wholesaler of premium wines and beers, distributing to the finest wine shops and restaurants in Virginia, West Virginia and Washington D.C. since 1994.As a licensed distributor of alcoholic beverages, we must conduct our business in adherence to all federal, state, and local laws and regulations and sell only to licensed ABC establishments. We are prohibited from selling directly to the public, but will be happy to direct consumers to wine purveyors throughout our distribution area. Please contact us via e-mail or phone. Great press: Read about RVWC Sales Manager Tom Bjornsen and his guide to grower champagne in the December 2008 issue of Virginia Living Magazine, courtesy of Virginia Living Magazine.

Northwest Wine Distribution & Storage, INC Northwest Distribution & Storage, Inc. is the premier wine storage facility in the Pacific Northwest offering complete wine and liquor consolidation and transportation programs. We are a temperature controlled, secure, and TTB and OLCC licensed & bonded wine storage facility with full service capabilities. Services include wine storage, consolidation programs for distributors across the country, bottle and case labeling, and direct to consumer shipping through our subsidiary WineCo LLC. In addition to our nationwide network of partner carriers, we have a company owned fleet of tractor trailers which includes all refrigerated units, bulk wine tanker, and flatbed equipment. With over 35 years of experience, our transportation division offers scheduled trucks to wine consolidation facilities and weekly service to destinations throughout the country. One call does it all – with Northwest Distribution & Storage, Inc.

Notes on Wine Distribution v.32 - ShipCompliant The latest version of ?Notes on Wine Distribution?, by R. Corbin Houchins, is now available. Release 32 includes updates on legislation, litigation and general discussions on available distribution channels for wine. This release includes substantial changes, including new sections on age and identity, facial neutrality, and logistical support services, as well as updates to state summaries in Arizona, Delaware, Kansas, Kentucky, Maine, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington, and Wisconsin. Read about these and other updates that affect the way wine is sold and shipped within the United States. If you are at all interested in the shipping and distribution of wine, this is an excellent resource that is well worth reading.  You can view the most recent version of the document anytime by visiting the ShipCompliant Blog and clicking the link located under ?Compliance Resources?, or by visiting CorbinCounsel.com and clicking on the home page link, ?Notes on Wine Distribution.? Click Here to View NWD Release 32 Share This This entry was posted on Thursday, February 4th, 2010 at 7:40 pm and is filed under Arizona, Delaware, Direct Shipping, Kansas, Kentucky, Legislation, Litigation, Maine, Maryland, Massachusetts, Montana, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Tennessee, Texas, Virginia, Washington, Wine Business, Wisconsin. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site. Tennessee now allows wine shipments as long as the winery has a TN state license. Yes, that's true. Page 47 of v.32 of the Notes on Wine Distribution describes this allowance in further detail. Best Software Downloads and Reviews. the most comprehensive source for free-to-trysoftware downloads on the WebBEST 4 DOWNLOADS Name (required) Mail (will not be published) (required) Website