Distributors eye winemakers large and small
Wine distributor executives recently told Oregon winemakers it’s a “fallacy” that large wholesalers aren’t interested in small producers.
Small volume wine brands are important to wholesalers, who want to represent a “prestigious portfolio,” said Matthew Green, sales and marketing vice president for a division of Palm Bay International.
Green acknowledged that demand for high end boutique wines was “a different conversation” during the depths of the recession five years ago.
However, sales strategies among distributors have grown more sophisticated, he said.
Wholesalers don’t just cater to “big box” stores and believe small wineries with a good story bring credibility to their business, he said.
From the perspective of wineries, a large distributor can offer more flexibility in certain situations, such as moving product quickly to create cash flow, Green said.
“Big is not bad,” he told the audience at the recent 2014 Oregon Wine Symposium in Portland, Ore.
Jim Oliver, senior president of fine wines at Glazer’s, said he also wanted to dispel misperceptions about large distributors, as they see small fine wines as “incredibly image building.”
“Size does not define how we sell our portfolios,” said Oliver.
Wholesalers don’t limit themselves to wine producers of a certain size — rather, different wine groups are segmented according to potential markets, he said.
The notion of “national” distribution of wine is complicated because geographic markets have different dynamics, he said.
Unless wine brands are well-aligned with the appropriate retail channels, it’s not a profitable relationship for anybody, Oliver said.
“We can go to market a lot of different ways,” he said.
For example, it makes more sense to distribute wines to select venues that are able to sell them frequently.
Distributing a wine brand to a large number of accounts where the bottles will simply collect dust isn’t a winning strategy, Oliver said.
“The shotgun approach these days doesn’t work,” he said.
That’s particularly true for wines with a limited volume, since dispersing the cases across a large area drives up costs, said Green.
“Where are your resources best utilized?” he said.
Simply making good wine is not a solid business plan, neither is “fishing for distribution,” Oliver said.
Wineries must think more deeply about how they represent and how their product fits certain sales channels, he said.
“You need to understand what you want to be,” said Oliver.
Similarly, wineries should seek to “maximize” the impact of their meetings with retailers and restaurants, he said.
Meeting with the right decision maker can be a lot more effective than spending the day riding along with a distributor’s sales representative, Oliver said.
Producers with a diversity of wine varietals and price points must decide which ones are the best for each market, he said.
When wineries insist that all their product lines are a high priority, “my eyes glaze over,” Oliver said.
It’s better to gain a foothold with certain products and then build on that success, he said.