I am a consultant.
I travel all over America and Europe helping business in the three-tier system. I work with wineries, wholesalers, brands, brewers, importers, and retailers. I have worked with the biggest and the smallest, and one thing remains true.
What keeps me on the road, working and away from family and a leisure life, is the thirst that my clients have to be better. I love that! That keeps me employed. I am baffled when our business of wines, beers, and spirits fights to stay in a mindset of, “I remember when” instead of what is happening now.
I am in airport lounge writing because these thoughts cannot wait until I get home. They need to get out now.
Wineries- the old days are gone. This is a brave new world, and the way to bring your goods to market has changed. When I visit marketing and merchandisers for wineries in California the thinking that their business model is 1000% reliant on the three-tier system baffles me. There is a reason why the DTC fight has such legs. It has such legs, because relying on your distributor to sell your goods every day is a losing proposition.
I can quote Carolyn Wente, when she says: “Unless you are the top sellers at distribution, you are forgotten.” I believe that too. So what are you doing about it?
Let’s do the math. If your wines are sold at distribution, and your distributor sells into 1000 accounts, and the 1000 accounts only carry 200 SKU’s each amongst all alcohol beverage, and of the 200 SKU’s they sell, only 20% of them sell with real velocity. If that is the case, then how can you possibly survive with a distributor being the only point of contact to the market?
My point is that DTC, virtual inventory, mail order, wine clubs, third party sellers, etc. all need to be in play. If you are a purist and want to be loyal and faithful to the distributor that you have been with for decades, then that very distributor can drive you to get your unemployment check.
We are on the verge of another holiday season. At retail 43% of yearly business is generated now. One bad weather related day in the 4th quarter could alter the whole course of the year. In my opinion that is a pretty precarious perch to be sitting on.
This year is too late, but we at Rosen Retail strongly recommend you look at a multi –channel selling approach for 2015. If you do not have that in your 2015 Budget, I would call that meeting tomorrow and redo the budget.
It does not really matter if wine, beer, or spirit is your main line product. What will matter more in 2015 then ever before is your go to market strategy.
I am not a doomsday guy, and I am not an alarmist. But when someone hits you in the head with a brick and then, afterward they say duck, you will wonder if the signs were there all along.
We all operate in a business that is steeped in tradition, romantics, and image. That said, we need to really get into the mud, dig around, and find the channel that is best to add to normal distribution.
My importer and winery clients have all created multi- channel routes to market, and all have had success. Breweries are starting to buzz about self-distribution, and only commodity wines and spirits are really tied to lock down distributor agreements.
My holiday blues comes in the fact that we are on the cusp of another selling season, and we all talk, write, complain, and lobby for different ways to engage the consumer; factually speaking the answers all there already.
Hopefully 4th quarter 2015 will be different.