Home Wine Business Editorial Three Tier Talk Three Top Ways to Pick a New Market to Enter

Three Top Ways to Pick a New Market to Enter

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When I speak at conferences and consult with new and old brands, I get the same question asked all the time. Different people ask this question in different ways, but in the end the question is always the same.

How do I pick the right market to enter?

I guess this would go along with my article about picking the right distributor. I love charts, graphs, and lists that can clearly and articulately paint a picture of what markets to enter. The data is all available – you just need to know how to turn the numbers into action plans.

  1. It is critical to know the consumption patterns of the product you want to sell. For instance, beer out sells vodka in Georgia, so is launching your vodka the best move in Georgia. Wine sells more than beer in CA, so launching your beer in Napa might be a dangerous step. When picking a market to move your product through, know the consumption patterns of the market.
  2. Does the local distribution favor what you are selling? There is a move lately where major distributors known for selling wine begin to change the portfolio into wine and spirits/ beer. They are just following trends, and who can blame them, but selling a Rye is different than selling a Cabernet, and I would hate to have distribution with a house that is known for one category and now is selling your brand as an add on product. It is always better to be the main line product than the add on product.
  3. Can the market pricing threshold meet your retailer pricing. There are wonderful beers on shelves in Beverly Hills, CA, but they do not sell, because they are too cheap. That is not a misprint. The per capita liquor spend in Beverly Hills is double that of Austin, TX. It is possible to price yourself out of play by pricing wrong for the marketplace. Know your area and know what is selling in the market before choosing a market to enter.

So follow these three steps when choosing a new market, and you will vastly increase the odds for brand success.

  • Know market consumption
  • Get with a distributor that sells your product as main line not bolt on and trend hopping
  • Is what you are selling your product for commiserate with what the local market wants to spend

If you follow these simple steps you should have a much easier time picking a market and being successful in it.

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 brian@briandrosen.com or twitter @rosenretail.

 
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1 COMMENT

  1. Brian,

    I couldn’t agree with you more, however the severe lack of wholesale distributors that are looking for new products can hamper distribution choices and make for odd bedfellows. Sometimes even being an “add on” to a book feels like a win.

    Many of our small wineries that produce wines from well established regions struggle because their target distributor already has several brands in their price point or category in their portfolio. We recommend taking stock of assets like relatives living in the town you hope to sell in, business connections in other industries that can be leveraged and keying into charitable and philanthropic causes that resonate with the distributors culture or management. You have to get creative to get noticed.

    Pricing is another area where most wineries stumble. The biggest problem we encounter is a basic misunderstanding of the three tier system, with shortcut math that cuts out too much margin for the wholesale tier. The other issue is pricing wines as a marketing statement (my neighbor is getting $55 for their Cabernet Sauvignon so mine should be at least $60) without knowing a cost-of-goods sold. You are so right that your price might actually be too low to succeed in a given market.

    I’m always inspired to write when I read your posts. Great advice that is very helpful.

    Cheers!

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