How to Effectively Work the Distribution Channel as a Wine Producer (part 1)

This is part one in a series of posts about how to effectively work the distribution channel as a wine producer.

One of the great things about having been involved in wine distribution is seeing all three tiers of the supply chain.  Wine distributors play the role of balancing the supply from producers with the retail demand and the best ones have a real good pulse on the market. 

Distributors can be lazy at times and entering the world of distribution can be a total pain in the ass, especially for the small wine producer.

Through many years of interaction with wine producers I've seen everything from the small brand trying to get picked up by distributors to well established brands looking to upgrade distributors in an underperforming market.  

Unfortunately what I often see is a process that takes much longer and is more expensive than it really needs to be.

Here's how the process typically goes:

  1. Ask other winemakers for distributor recommendations - "hey, do you know of any good distributors in [insert state]?"
  2. Google "wine distributors [insert state]" and browse a bunch of (generally) poor websites to figure out if your brand would be a good fit.
  3. Call or email distributors from the results of #1 and #2, tell your story and spend $100+ on product and shipping to get them your wine samples. 
  4. Wait patiently to hear from the distributor. Wait some more. Then keep waiting.
  5. Pester the distributor until you get feedback, often settling for an ambiguous "we really liked the wines and we just need to figure out when we can bring them in"
  6. Wait patiently for a PO and in the meantime wonder if you should contact other distributors.

There are of course exceptions to this, but I've heard some variation of the above countless times so I know this is a pervasive issue.  

That said, there are some simple tips that can dramatically improve this process.

First, as a small wine producer, try to avoid the temptation to cold call / cold email.  From my experience, the ROI just isn't there.  

The time and money involved in cold calling distributors will often far outweigh the low chance of both receiving a PO and actually getting paid on time.  

Worst case you get into a "no pay" situation and have no social leverage through mutual connections for any recourse.

For the wine producers without a good set of connections, a more effective way to engage distributors is through a carefully selected set of target accounts in the market.  If you have the luxury of visiting a market where you want to distribute, spend your "Google time" researching the best wine programs for your brand and talk with the wine buyers first not the distributors.  

I would recommend asking the wine buyer two very specific question:

1. What wine distributors do you work with on a regular basis that consistently have good service in both sales and delivery?

The key words here are regular basis and consistent. Regular basis implies a distributor that is established enough to get the regular attention of one of your target accounts vs. a distributor that has worked with the account but struggles to maintain attention.  The word consistent will often filter out the distributors who struggle to keep inventory and operate with thin capital - a big red flag.

2. What wine distributors would you never work with and why?

You are likely to get a variety of reasons why, so the key here is to discern between distributor performance reasons vs. personal reasons. Plenty of buyers will have some mixed history with distributors for reasons that have nothing to do with performance, but either way it is a red flag if this is a target account.

If you do not have the luxury of visiting a market and talking with wine buyers, then anytime you interact with buyers from markets that you are interested in gaining distribution, ask these question and keep a log (I recommend using Evernote).  

Once you hear the same names come up, then you can start to build a short list and research the portfolios to find your top choice. This process can take some time, but in the long run it can be a faster route to consistent POs and timely payments.

Unfortunately, there are no shortcuts to rapidly grow distribution. It takes time, patience and the right strategy.

Now once you have your top choice, resist the urge to reach out right away.  Instead, reach out directly to the wine buyer at a target account in their market, ideally someone who gave you recommendations and positive feedback towards your wines.  

Send them a few samples along with a thank you card explaining that you appreciate their input and are considering approaching [insert top choice distributor] for distribution.  

Then, follow up and get the feedback directly from the wine buyer and just ask the question, "if my wines were available in your market, would you consider working with them?" - if the answer is yes, ask for an introduction.

This approach can be very powerful in two ways.

First, the distributor will always respond when a communication comes directly from an account - use that as a point of leverage.

Second, the distributor will be much more likely to engage with you if there is a good chance for an initial placement.  This approach helps mitigate the  biggest risk from the distributor perspective - can I sell the wines in my market?  

In effect, you're doing a bit of the distributors work for them (remember: distributors are often lazy), but the prospect of a new sale will always get them to perk up.

In part two of this series, I will focus on how to determine if the distributor is a good fit for your brand.