By Laurie Wachter
The fact that two marketers are moderating Wine Industry Network’s (WIN) 3-Tier Wine Symposium this year is not by chance. WIN launched the one-day conference in 2019 to help wine industry executives and owners view the challenges of selling via the wholesale channel through a new lens—one that opens their eyes to new opportunities.
“We wanted to help small wineries think about their growth in new and different ways,” says Symposium moderator Laura Webb, a marketing consultant with OKOS Partners and former brand manager at Brown Forman. She has found that small wineries and distributors often regard each other with disdain and frustration. “I feel like the relationship has broken down over the years,” she says and wants both sides to realize they need to work together to reach common terms on how to operate. “They’re all in this for the same thing—to sell wine.”
George Christie, President of Wine Industry Network, has the same observation. “The wholesale channel, and the 3-tier system in general, is a major pain point for just about every small to midsize winery that wants to grow their brand beyond the tasting room. Given the current wine sales environment, it hasn’t gotten any easier, and tasting room sales aren’t growing like they were either. It’s a challenging topic, but one that needs to be tackled,” adds Christie.
The day’s other moderator, industry veteran Eric Guerra, the 2018 North Bay Business Journal Winery Sales & Marketing Officer of the Year and author of a new book, When Great Wine Is Not Enough, points out that wineries who use their insights to anticipate consumer demand can find their niche for success. He offers the examples of Kendall Jackson winning with Chardonnay when it was exploding and Meiomi doing the same with Pinot Noir when it was gaining traction at the mass level. “Brands that do well,” he says, “have the right messaging with the right innovation at the right time.
But innovation is far from a panacea. “Innovation will initially drive growth more quickly,” says Guerra, “but growth will eventually hit a ceiling.” That’s partly because the industry has made its product the same way for a long time. “We’ve conditioned our customers to expect the same things, and as a result, they’re hesitant to accept change. When you look down the wine aisle in any store, they all look the same.”
He adds that “Much of this is because most consumers who genuinely like wine, don’t understand it very well. They want the comfort of relying on a brand name that they know is going to be good. That means the bigger brands are entrenched. You see them on the shelf and at parties; people talk about them.”
That might explain why wineries have told Webb that their appeals to distributors all over the country often receive no reply. “Why would they?” she responds. “You’re no different than the thousands of other wineries until you tell them something compelling—something different—about your winery. You’ve got to make your story stronger and give them a reason to see your product fulfilling a unique niche.”
Webb believes, that with so much consolidation, there’s a place in the industry for distributors who can nurture small brands and then hand them off to their bigger brothers. However, she cautions, “As a small supplier, getting in bed with any distributor does not mean you can forgo selling your product. You’re the best salesman for your brand.” Often, small wineries expect a distributor to get them in front of people and markets they wouldn’t otherwise be able to penetrate. But distributors are fundamentally focused on the logistics of moving product—they’re doing inventory management, warehousing, transportation and fulfillment. “To expect that they will do more than that for a small brand is unrealistic. The most successful brands have brand reps out there doing events and serving as the face of the brand in the market.”
Typically, the payoff for the distributor to put time and effort into selling a brand isn’t worth their while until it’s bigger. Laura advises that wineries focus on building relationships to generate “that sense of pull that happens when retailers start to call for the brand.” This can be effective even at a micro-level, a single market or retailer. The goal is to get more of your share of voice in that niche. Often, there’s an influencer at a distributor who makes that happen, so giving extra attention to a key relationship can pay off. “Bring them to your winery,” Webb suggests. “Get them more engaged with your brand. Be on the lookout for nurturers of your brand at the distributor and retailer level.”
As a marketer, Guerra is a strong proponent of delivering the right message at the right time to the right audience. “Success depends on how you manage the sales channel, not the size of the winery,” he says. “Recognize where your brand should play, whether fine wine shops, grocery chains or direct-to-consumer. Adventurous wines sold through DTC can offer unique fun and daring wines to an audience that is seeking it, but fine wines rely on a sense of place and the assurance of quality.”
“The primary objective for the day is for attendees to leave inspired with new, actionable ideas on how to improve their brand’s performance in the market. Between the level of knowledge and experience of our speakers and Laura and Erics’s expertise to guide the conversation, it’s sure to be an insightful day,” says Christie.
The 3-Tier Wine Symposium takes place at the Hyatt Regency in Santa Rosa, CA on May 7, 2020.