New Year; New Climate for Wine Business…
Never in the history of the US wine market have things been more competitive. And the route from vineyard to shelf (or wine menu) is fraught with peril. So many new pressures now come into play that did not exist even ten years ago. The biggest factor is the every-shrinking selection of distributors (wholesalers) and the bursting-at-the-seams proliferation of new wine brands. This conspires to create an extremely difficult “bottleneck” on the path towards quality distribution. More reason to partner with a capable and experienced importer.
An international wine brand that fails to accept (and adjust) to the new environment could be headed for trouble.
Not all wine importers are equal
When it comes to choosing an importer for your wine brand(s), it pays to do your homework. Measure twice, cut once as someone wise once said. It’s one thing to find an importer who can clear your wines into the US market. It’s quite another to obtain repeat orders over the long haul.
Below are 4 important factors to consider when shopping for a new importer. Are there more than 4? Most assuredly. But, this quartet of guidelines is a great place to begin.
1. Situational Awareness
It’s quite remarkable how completely unaware some importers are with regards to the massive headwinds that new entrants to the US wine markets face. According to Silicon Valley Bank – a leader in wine industry financing – there used to be an almost equal ratio of wineries to distributors here in the US in the mid 90’s. But today that ratio has swung hard in the wrong direction. The result has been significantly reduced capabilities of distributors due to the overwhelming size of their portfolios. What can you expect when the pool of distributors is one fourth what it used to be and the number of wine brands has quadrupled! Any expectation that distributors will be able to build new and high-quality distribution is completely disconnected from reality. Your importer must not only be aware of this new reality but positioned to accommodate it.
2. Tops in Tech
Here’s a clear tip-off you’re dealing with an outdated business partner. Go to the website of a prospective importer and see if they can check the following boxes:
- Optimized for search
- Links to social platforms
- Lead capture/ email list signups
- Fast-loading images
- Clean, clear and simple navigation
- A strong but limited color palette
It is the year 2020, after all. If your importer hasn’t kept pace with the rest of the global business universe, it’s a clear sign they might be “stuck” in a bygone era. It is possible to be a great importer with an old clunker of a website? Yes, it’s possible. It’s just highly unlikely.
3. Tightly Focused
It’s a big wide world when it comes to wine and it’s easy (and temping) to try to be too many things to too many people. Importers that have a deep but narrow expertise will consistently outperform those whose strategy is “wide and thin.” Its’ more valuable to specialize in a small number of wine-producing regions as opposed to “covering the world.” And, ask prospective importers how often they travel to those regions.
The same approach holds true in an importer’s go-to-market strategy. Instead of a shotgun approach its much wiser to narrow the focus of sales activity and investment to the most attractive markets. After all, only nice states out of fifty in the US do fully one half of all the wine business. Don’t be swayed by the more-is-more thinking of most importers.
4. Key Account Relationships
While the climate for selling wine has changed, the process, thankfully, has not. It’s still (and probably always will be) about relationships. And we’re talking quality over quantity here. Relationships with all the right people are essential, of course. But how those relationships were built and maintained is equally important. Integrity, accessibility, and dependability are qualities that take decades to gain and just seconds to lose. It is no longer enough for an importer to have strong relationships with distributors. It’s essential in these modern times to have direct access to major buyers (both on and off premise).
Choosing an importer for a business partner is no small thing. But, with a little patience and a lot of homework, the risks can be dramatically reduced. Entry into the world’s biggest market is what’s at stake.
About the author
Ben is the founder and President of Salisbury Creative Group, Inc. which specializes in helping wineries and craft distilleries achieve high levels of sales effectiveness. Prior to starting his own company in May of 2014, Ben spent 17 years as VP of On Premise National Accounts for both Ste Michelle Wine Estates and Constellation Brands.