Finding a good national sales company / broker is becoming increasingly important in a crowded market.
By Kathleen Willcox
The wine market has changed.
Between the consolidation of distributors, the dominance of big players such as Southern Glazer’s Wine & Spirits (which accounts for more than one-third of the market alone), and the rise of e-commerce, it’s both harder and easier than ever for wineries to get their product into the hands of thirsty consumers.
Easier because almost anyone anywhere can order and receive wine with the click of a few buttons. Harder because there are so many options, how will a young wine enthusiast in, say, Dayton, Ohio, find out about a cool new winery from Lake County, Calif., unless someone tells them about it?
That’s where a good wine broker comes in. Not that they necessarily go by that name.
“We stopped calling ourselves brokers because people don’t immediately know what that means,” explains Michael De Loach, co-founder of Michael De Loach Brands. “What we do is everything a distributor does, except take possession of the wine.”
De Loach’s network is broad and deep, with reach in all 50 states and the District of Columbia, thanks to a network of multi-state distribution partners that includes all of the big players you’d expect, plus regional wholesalers.
For Wineries Seeking Growth
Finding a good national sales company / broker is becoming increasingly important in a crowded market beset by mergers, declining DTC sales and tepid visitorship. When wineries need to establish wholesale markets — or find that their current distributor is too busy with other brands to support their growth plans — partnering with a broker can transform their bottom line.
“Working with us gives wineries access to new markets and complete control of their product,” De Loach says. “They have possession of their wine, and we just work with our network to get it out there. That means they have complete control of where their wine ends up, which is important from a brand management perspective.”
In other words, unlike with the classic distribution model, where the distribution company has bought a winery’s product and therefore owns it, a winery won’t find its three-year-old rosé selling for 80% off online.
That said, “We do work with wineries all the time that have a ton of backstock,” De Loach continues. “In that case, we have relationships with very discrete e-commerce retailers. They’ll be able to sell through back vintages without hurting the winery’s image.”
De Loach says it’s a win for buyers, too, because they know that he vets the brands his company works with, only bringing on about 12 wineries at any time. Sometimes the relationship is permanent, while other times, he says, it’s a short-term growth fix, with plans to bring sales in-house. (De Loach will also work with brands on hiring effective internal sales managers, he says).
Gina Schober, owner of Vinifera Wine Marketing, agrees that wine brokers are becoming increasingly important in an increasingly anonymous market.
Individualized Attention
“The relationship between a broker and a winery is really hands-on,” Schober says. “I’m in constant contact with wineries, talking about inventory and changes in stock. We never offer anything at a discount without checking with the winery, and they are able to completely control the narrative, because they still own and hold the wine. We just offer them opportunities.”
Schober also believes that the broker-winery relationship reflects the authentic spirit of the wine business that she essentially grew up in as a sommelier, wine sales rep and wine producer. (She and her husband, Jake Stover, co-founded SANS Wine Co.)
“I think this model is growing right now because it gives everyone what they want — and what’s often missing in the market,” Schober says. “I’m reachable by everyone. They can control their own destiny. I prioritize relationships and I take hospitality very seriously.”
To better serve everyone, Schober also started offering wine marketing services at Vinifera. She helps wineries craft three-sentence elevator pitches and then provides those pitches to her customers.
“Everyone’s wearing multiple hats now,” Schober says. “Sommeliers are working the floor, restocking, reworking wine lists, training staff. If we can help everyone tell the story of a wine we work with, that helps all of us.”
Bottom line, the model is driving sales in a down market.
“Our approach is ‘Ready, aim, fire,’” says De Loach. “We have more than 100 distributors we work with, and our sales reps know what’s going to happen before it hits the Mark Brown report. We have worked with small multi-generational California family brands and international wineries with 4 million case productions. Through our hands-on approach and network, we are able to help these guys [who’ve seen sales dry-up] sell through back vintages and grow current sales 10 to 20%.”
The wine industry was built on relationships. During a tough time, that neglected foundation is ripe for a comeback.
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Kathleen Willcox
Kathleen Willcox writes about wine, food and culture from her home in Saratoga Springs, N.Y. She is keenly interested in sustainability issues, and the business of making ethical drinks and food. Her work appears regularly in Wine Searcher, Wine Enthusiast,Liquor.com and many other publications. Kathleen also co-authored a book called Hudson Valley Wine: A History of Taste & Terroir, which was published in 2017. Follow her wine explorations on Instagram at @kathleenwillcox
