Selling more wine & spirits is the #1 imperative With very few exceptions, the number one request I...
3 Things You CAN Expect from Your Alcohol Distributors
When it comes to working with alcohol distributors in 2023, one of the biggest mistakes I see winery and distillery owners make is depending too much on them to build sales & distribution.
I have also written a lot on the topic! Now, I'm not saying don't depend on them at all, I'm saying don't depend too much on your distributors.
What I haven't talked a lot about is what you CAN expect from your alcohol distributors and that is what this article is all about.
What USED to work no longer works (or works as well)
It's a big mistake to confuse the past with the present. Do you know at one time there was almost an equal number of distributors and suppliers in the U.S.?
There was a time when you could truly partner with a wine and spirits distributor. You could sit down with them and create long-term plans. You could educate them on your brands. You could encourage them, get out there and work with them. There was a lot you could do to make the partnership really work. It was a win-win situation.
But those days no longer exist.
And the reason is quite simple, there's just way too many brands out in the marketplace and way too few distributors. Those two trends have been going in opposite directions. There's more than 16,000 domestic wine brands in the U.S. and there's less than 700 distributors. It's just an unworkable situation. So if you're still doing things the way you did 10, 15 years ago, you're going to come up short and you're going to be frustrated.
It’s hard to accept this new truth because alcohol distributors SHOULD be able to sell for you!
Now, there's a part of our brain that just has trouble accepting that distributors can't do what they used to do. They have so many people, right? You're just one or two people or a small team, but here’s this big team to the rescue.
I can't tell you how many times I see people throw a lot of energy into trying to find just the right distributor, because the thinking is, "If I can get in there and I can get them to carry my products, I'm going to build all this new distribution and the sales will follow." It makes sense, doesn't it? It makes total sense.
The problem is it's just not based in reality anymore.
Set aside the “old” playbook
I see so many people running plays out of the old playbook. What's the old playbook?
- Spend time with the distributor
- Educate the distributor
- Motivate the distributor
- Incentivize the distributor
- Work with the distributor
All of these things are an attempt to get the distributor to act, and THAT is the problem!
Here is what you CAN expect from your alcohol distributors:
I submit to you there are three things realistically – and at a minimum – that you can expect.
Anything above that is gravy. Anything above that, good on you for being able to do it. But if you start with this realistic baseline, you're going to be a lot more successful because your expectations will be aligned with reality.
- So the first thing that you can expect from your alcohol distributors is to hold some of your products in their warehouse in inventory. And that is not unrealistic, not very sexy, doesn't sound very exciting, but it's important. It's an important part of the three tier system, getting the goods from your winery or distillery into the distributor's warehouse, where they can then be delivered to the accounts that you sell.
- The second thing you can expect from your wine and spirits distributor is to deliver to the accounts that you or someone from your team has sold to. That's the new reality. You cannot expect your distributor to sell for you. There's really only one way they're going to do it, and that's if you pay them to do it. And you're already paying quite a bit in terms of what they make in gross profit, it's reflected in the price that finally makes it to the shelf or on the wine list. So realistically, you have to understand that if you want to get them to go and do something for you, you're going to have to pay a lot extra to do it. They just have too many suppliers they're trying to take care of. And this goes for small distributors, large distributors, medium distributors. It doesn't matter the size, they're just overwhelmed. They're all overwhelmed. Smaller distributors have fewer salespeople. The ratio of brands to salespeople is fairly close, whether you're in a large distributor or a small one.
- The third thing you can expect from them is to match your efforts. So let’s say you go out and you and your team build 20, 25 new points of distribution, win over 20, 25 new fans both on-premise and off-premise. Now, you can go back to the distributor and say, "Look, we're out there building distribution. Can you at least match our efforts? Can you go get 20 or 25?" I promise you, they're not going to go do it first, you have to go do it first. But this is a much better conversation to have with the distributor; when they see you out there doing your part to identify the best accounts, to understand what the competitive landscape is, building new distribution, they're far more likely to roll up their sleeves and help you.
Good communication with your distributor is KEY!
Just one note of caution, when you're out there selling, there's two things you've got to do. One, is to keep the distributor posted on your activity. This is very important.
And the other, is do not ever compete with something that's already in their portfolio. You must spend time learning their portfolio, so that you don't interrupt anything that they have going on in terms of distribution. If you're going to gain new points of distribution, take it from your distributor's competitor. That would be the only acceptable way to do it.
Even the largest suppliers struggle with this!
I spent many years working for two of the biggest wine companies in the world, Constellation Brands and Ste. Michelle Wine Estates. At Constellation Brands, we had our own sales team inside the distributor. You would think that would be enough to get the goals achieved. But like everything else, with those kinds of arrangements comes much higher expectations.
So it doesn't matter if you're a large supplier or a small supplier, you still have the same problem, and that is distributors are overwhelmed.
The burden of growing sales and distribution has shifted to the producer!
So you are going to have to do the selling. You are going to have to build the distribution. The good news is you can do a lot of this digitally. You can create your own demand digitally. And I have so many resources, most of them free, about how to do this properly such as these:
- How to Generate Demand For Your Wine & Spirits
- Wine Email Marketing Strategies to Boost Wine Sales
- The Anti Newsletter Email Strategy
- How to Sell Wine Online Like a Pro
- 9 Top Wine Marketing Tips
Times have changed and so must YOU!
Remember not to confuse what the world used to be like. Don't confuse the past with the present. You must upgrade your approach to the market.
Start taking more control of your own destiny. Have realistic expectations of what your wine distributors can and cannot do.
If this article has caught any attention in your mind at all, you must avail yourself of this free resource. It's an online course called Modern Sales Playbook for Wine and Spirits.
It has six modules helping you to learn how to leverage The Modern Playbook, the “modern” way of approaching building distribution for brands in the marketplace, whether they be wine or spirits.
It's totally free! More than 300 people have already gone through this course, and many of them have gone on to the next level of achievement in terms of how to leverage the modern environment.