Not so long ago, wine producers realistically imagined they could select importers and distributors for the wines they wanted to export. Would company X be better for my on-trade-focused wines? Or should I opt for company Y?
Today, as the number of distributors has contracted, and many that remain are more interested in shrinking their portfolio of producers than adding to it, the wine market increasingly resembles a Victorian livestock market: rows of stock being walked out, inspected and passed over by buyers who can afford to be fussy.
I am writing this in Manhattan, where I just moderated a panel on US distribution at the Vinitaly USA/Wine2Wine trade fair. The audience included Italian producers from among the 300 participants hoping to get into the US market, while the panel consisted of Francis Creighton, President of the Wine & Spirits Wholesalers Association; leading alcohol industry lawyer, Sean O’Leary; and specialist importer, Bartholomew Broadbent.
Over about 45 minutes, we tried to make sense of the three-tier system, weigh the pros and cons of going national or state-by-state, and cover a range of other topics, including tariffs and the fallout from the collapse of RNDC, the second-biggest distributor in the US.
I’ll write about that session soon, but it’s not what I’m interested in today. My focus here was prompted by a LinkedIn post by Rohan Duggal, who describes himself as a “fractional New York State Manager for Liquor, Wine and RTD Brands”.
Duggal is almost always worth your attention, but this effort, which I read a few hours after our Wine2Wine panel, is particularly good. In it, he challenges producers to take a long, hard look at what they have to offer a distributor beyond the quality of the liquid in the bottle.
“If you were the distributor,” he asks, “would you take on your own brand? Would you bet your warehouse space, salespeople, trucks, customer relationships and, most importantly, attention on this brand?”
Most producers underestimate the varied costs to a distributor of taking them and their wines on, just as few people who complain about restaurant markups acknowledge the capital tied up in the stock needed to support a long list.
As Duggal puts it: “Southern Glazer’s services 7,000+ brands across 47 U.S. markets. Think about that. You’re walking into a crowded house asking them to make room.”
So, let’s move on to his Distributor Test. Each item on the list is worth a certain number of points out of 100. The object of the exercise is to score as highly as possible.
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