Home Wine Business Editorial Three Tier Talk Three mistakes every small winery makes when dealing with retailers, and how...

Three mistakes every small winery makes when dealing with retailers, and how to correct them for more sales into the channel

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Rosen 2 quoteAs an alcohol beverage consumer I drink all types of libations. I love the gins, especially the handcrafted ones. Micro beers are so hot now that if you wait one week a new one will appear on your retailer’s shelf. Finally there’s wine, glorious wine! So many choices, varietals, regions, styles, micro-this, bio-that, and fermented out the ying-yang. The choices are endless, and I love it. That is of course, as a consumer.

As a retailer, a long-standing, established, frenetic, end of the three-tier system retailer, I hate it. I wanted to write a piece that can help the small winery sell more goods into the channel and support the goods positively during that last step in the 3 tier system. Our team firmly believes that the obstacles that are encountered at retail can be easily turned into opportunities for wineries and artisanal crafters alike. As always our key and your key should be; know thy neighbor. Said another way; do your research, know the retailer, support with data, and don’t fall in love.

Know Thy Neighbor

Wineries often forget that when they come off the pristine grounds of said winery to visit the market they are entering the lion’s den. Retailers are doing 1000 things at one time, and a winemaker visit or a winery visit does not stop the day’s activities. I remember being visited by a top Napa winery, and there was an invitation to lunch from them. I accepted, but it needed to be at our sales counter and could not last more than 10 minutes. That is an example of what the retailer’s day is like. In knowing thy neighbor, know they are busy, shorten the pitch, adjust your conversation to the basics, and get in and out. That will provide for a more meaningful visit.

Support with Data

A retailer’s motivation for buying a good is often a mystery. Retailers need to manage what to carry with what competitors are carrying, while still trying to maintain the veil of being unique. What always resonated with me was when a winery that came in with supporting data. Metrics that I often used for decisions were simple, but rarely used in a sales visit. Price, deal, support, potential gross margin percentage, scarcity, who else is carrying it, any marketing behind it, etc. From a retailers perspective, especially the 33,000 independent’s and not chain stores, it comes down to a choice; if I take something new in, I need to replace something else. Give me a financially compelling reason why I need to replace a wine with your wine? That is what matters to retail. It is so much more than the percentage of Cab Franc that is in the bottle.

Don’t Fall In Love

Many wineries were started with passion and love. If you go to a random coffee shop in a random wine growing region, you are bound to hear stories about the wary traveler that traveled to wine country on vacation and fell in love with the life and bought some acres. Have you heard the one about the wealthy businessman that wanted to start a winery as a hobby? We all have! Your love, and rightfully placed, is your love, and not the same as the retailer’s. An unemotional sales pitch or retailer visit will yield more fruit than yarning on about the lifestyle. A retailer gets hundreds of sales calls a week from all tiers and all products. I can promise you that a succinct visit will get you better results.

We are all in the wine business, and we all love the wine business. It is critical to remember that the wine business is about wine and about business. When calling on retail or doing “ride withs” on the distributor side, know that the business part is what the retailer wants to hear. I was visiting with a large retailer yesterday, and I asked him what criteria he used to discontinue a SKU (stock keeping unit)? It was a one-word answer; depletion. If a retailer cannot make money on your item or have a gross margin healthy enough to carry it for 30-60 days, it will be either discontinued or never purchased again. That is the business part of the wine business, and that will happen guaranteed no matter the slope of the hillside the wine is grown on.

Brian RosenExpert Editorial
by Brian RosenRosen Retail Method

Rosen Retail for Alcohol Beverage offers support to retailers and suppliers alike, having created Supplier Boot Camp and Retailer Boot Camp and other award-winning programs that increase gross margin for retailers and cases sold for suppliers. Brian Rosen can be reached at [email protected] or twitter @rosenretail.

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2 COMMENTS

  1. Yeah, it’s a business, we all get that but the majority of the small producers I’ve dealt with over the years, it’s also about passion – something sorely missing in this conversation. I don’t know Brian Rosen, and perhaps I’ve misinterpreted the soul of his thoughts, but if I was a small artisan producer that traveled across the country and was treated as disrespectfully as this, I would take the blood, sweat and tears of my “business” elsewhere – probably to his competitors!

  2. Brian,

    I like the article and your thoughts. One of the other unfortunate items about people in the wine retail business (besides being busy) and it hurts everyone including the consumer at some point, not many good “business people” in the world of wine retail.

    Most do not take responsibility for what they buy to sell. After 30 years on that side of the biz it was and still is a cold hard fact. Most Wine Retail Business owners should go back to college or something similar to learn the ABC’s of Business. I could keep typing but it’s only the 2nd of this new year we call 2015…

    Cheers!

    Keith Miller
    Wine Life Radio

    P.S. And the folks that make wine to sell should work retail for at least a year. They would get farther faster !

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