In my last post I talked about wineries trying to penetrate the U.S. market using the wine trade event as a vehicle. This topic is directed at the U.S. importer/distributor that has just launched their first brand or brands and is looking for a way to gain local exposure and create buzz.
I say “importer/distributor” because this is a different animal from:
a) an importer who is selling only to distributors. In this case the importer is, or should be, concerned with the big picture. Having brought in a container of wine, the focus should now be on connecting with distributors in different states, forging relationships across a swath of regions and sometimes the whole country. Local events are not going to further this cause and will, in fact, take time and attention to a macro from a micro level;
b) a distributor that is buying their wines from an importer rather than importing their own. They should be concentrating on building up critical mass in a portfolio with broad market appeal throughout their retail territory. Their concern is providing their sales team with sufficient opportunities for sales across a broad spectrum of vineyard regions, styles and price points. Trade shows and tastings will become a factor in their sales programs, but not normally the point of entry to the market for one new brand or a small number of new brands.
The new importer, who is also the distributor in their own state, has chosen to launch their first brands utilizing a ground swell from their home turf. They are counting on developing a local following for their wines and building from there. This importer may also be developing distribution in other states and other ways, but if they have chosen to become a distributor, along with the usually onerous licensing and infrastructure, it is incumbent upon them to start building sales volume locally first. They know this market and its demographic makeup. This importer eats at local restaurants, often has connections to people in other professions and businesses and develops a team of willing friends and volunteers, some of whom become part of a professional sales team.
Which brings me to the local wine event. My mantra, throughout my wine importing book, and in all my wine business advice, is to make every expenditure count. No matter the level of your financial worth or business budget, I see no reason to waste money. If you’re going to do a local wine event, weigh the factors. Does it bring in sales? What is the goal? What is at least a rough cost benefit estimate? Running around town pouring wine for everyone’s wine tasting may make you the most popular person of the moment, but that isn’t the point. You want bang for the buck.
Is the event tied to a retail selling opportunity? If you hold a wine tasting at a local wine bar or restaurant, do they have a retail store, or will someone be in attendance that can take orders, or give a coupon for 10% off at the nearby store if you buy the wine there? Has the store already stocked it? Doing the wine tasting in the hope that the store will purchase the wine if they see enough interest is no sale at all. When a customer comes into the store and finds they have to order it, waiting days or perhaps weeks for delivery, they’ll lose interest quickly. The public is fickle. They may love the wine you poured last night, but if they can’t buy it then and there, or at least the next day, chances are they’ll move on. And they will forget.
Does the event give you exposure beyond the event itself? I’m normally cautious about consumer-only public wine tastings, but at the local level it may be positive exposure. If you sponsor a local golf, tennis or charity event, presuming the expense is manageable, will the local paper and online press give it an extended shelf life? Are there people in attendance who are influential or likely to remember the wine, purchase it for themselves, or recommend it to others? Can you promote it before and after for additional brand exposure? Can you use the event to continue to promote the brand in conjunction with the event’s cause in other settings? Is it likely to elevate the brand’s quality, giving it a ‘halo’ effect by virtue of its association with certain occasions or people?
Whatever the event you choose, make sure you tailor your approach to the setting. If it’s a wine bar or wine dinner, have knowledgeable, professional people hosting, or do it yourself. If it is a sports or outdoor charity setting, think of a theme that will direct attention to your wines and ‘brand’ your brand. Make it entertaining and enhance their experience. Make it memorable. And always have lots of photos taken for the website and Facebook page. Let your retail customers, and potential distribution customers see that you get behind your brand and you are out there promoting it. The website or Facebook page becomes interesting, interactive and builds momentum for the brand. And who knows, a retailer who would not otherwise have stocked your wines may suddenly decide they have to have them.
Wine events can be fun, they can be a great perk to the business and they can help launch a brand when everything comes together. Just don’t lose sight of what you are trying to achieve. Look at what you need to do to maximize your return, so that you can continue to do events and continue to enjoy them because they’re also providing a sales and expansion opportunity.
GladiatorWine (@GladiatorWineNY) said:
I felt like this article was for me because I’m in the process of starting an importing/distribution company. Deborah, your blog and book are the only sources that have given me insight into the aspect of the wine industry that pertains to my situation.
My goal is to read every one of your articles on this site but I have just one BIG question to ask you that I haven’t found the answer to:
How can I know if I can even sell my wine to retailers? Even if I make the investment and make the proper preparations, and do everything that is necessary, I will be in a gigantic competitive market that is probably saturated with little distributors/importers like me. NYC is my home 😉 I’m afraid that my wines will collect dust and so I’m scared to invest my money.
Hi Gladiator, and thanks for the compliments on my writing. It always means a lot to me.
You’ve asked one question that opens up a big discussion, and requires that you answer so many questions for yourself:
1) do you have wines that meet the demands of the market – i.e. price, style, packaging, etc?
2) have you looked at competition in your category? Yes, NY/NJ is a very crowded market, but there is also a large population with discerning wine tastes and disposable income. It is a difficult market to get into for importers, but you leap that hurdle by becoming a distributor. By “your category” I mean using the criteria from item 1., and by comparing wines from the region from which you plan on importing. If there is very little from your place of origin, then look at competition in general in a category of e.g. Eastern bloc countries, or South America or of the style/price of your wines, e.g. comparable Syrahs.
3) have you done at least a rudimentary business plan and budget? It is more to focus your own goals and objectives and how and when you plan to get there. It can help identify issues you hadn’t thought of before, such as transportation, warehousing, how much wine you need to sell to make a profit, what sort of assistance you need…
There are many other items to consider, but I truly believe that even in a “saturated” market (and you could include the whole U.S. in that) the person with a good product, priced appropriately, working diligently, approaching the project enthusiastically and building relationships with integrity still has a very good shot.
If there are other issues you are grappling with that need more in-depth help, I do offer phone or Skype consulting.
Best of luck!
GladiatorWine (@GladiatorWineNY) said:
Thanks for your answer Deborah! I’m almost finished with my budget and I still need to put a business plan together. In the meantime, I’m studying like crazy! A consultation would be a good idea in the near future.