Imports,Wholesaler,Wine,Wine Sales,Winery

Small Producers Don’t | Won’t Matter to Wholesalers ~ Perhaps Ever Again

Once an oligopoly is formed, like the big three car manufacturers (General Motors, Ford, and Chrysler), it takes (and took) an outside  invasion to enter the US, offering greater value. Then, it will cycle back again…in continual consolidations.

Worldwide, now, will be determined by who’s cashed out and who’s cashed into the most gold. Gold is the world’s real economic  standard, and China leads in that department... So, just get ready, while the US and Russian egos battle for who’s all that… (Hilarious? Maybe.)

Globalization began in the 1960s, my friends. In Lewiston, Maine, I first saw Bates and Pepperell mills close. (This was pre-Detroit, and began a process I had not seen yet.) I remember telling myself, “the world is going to be globalized. Every country is now going back to child labor, pollution not being regulated, and wages that less than a dollar a day is going to be ‘pre-rich,’ by their standards, for those lucky enough to get one of these jobs.”

The Set is *MORE* Controlled Than I EVEN Imagined. How naive was I, anyway?

I recently wrote, “The Set” ~ Could it be more controlled?, only to privately find out, “Well yeah!”

It’s not just the wholesalers, it’s also your supermarket chain divisions. Here’s capitalism at work…

I got a private Email from someone who knows the system well, and this is what was explained to me.

As I explained to my source, when I sold wine, I wasn’t the national chain sales manager, so I was never privy to this info; although, I did hear some rumblings about the stage where this game is played out. I just never had to work it. Here’s how the Northeast works. You can apply this to all areas of the US. The northeast isn’t an isolated area… Only the names are changed as you go along with the chains.

Once a year in January, Chain Marketer A (corporate office in the Midwest) sends out a request for all distributors in their respective markets to suggest new products for the store sets. The national sales guys get first crack and domain based on the back room, dark alley shelf placement deals. They then select about 15 new SKUs to add to the shelf and drop about 15 -20 SKUs. They then send out a list in early March for store resets in April to June.

Most store /category managers at the store level, can make a few small additions and subtractions based on market demands, but are not empowered to alter placement. Store plano-grams are sent down from the Midwest and suppliers are tasked with making it look similar.

Chain Marketer B is slightly different in that as a regional supermarket. They have a cattle call for new products. Major brands are given designated appointments to pitch samples (two bottles each) and the rest are taken American Idol style, wait in line, turn over two samples and price sheets placed on long tables ……next please…. A week later they send out an add and drop report, with this year’s authorized product list.

This process happens regardless of the current pending legislation. National sales guys will still have the lion’s share of the products, regardless of local distributors desires.

So, there’s how it’s done, boys and girls, for those of you with a brand and having wanderlust about going to wholesalers who you think “might” pick up your brand for sales outside of your winery.

What will you do to be able to break that chain?

I think it helps to understand the system and reality of it all, because I work with many small producers of fine wine, who just don’t “get” why their wonderful wine is just not picked by wholesaler or chain stores. Now, it’s spelled out… right here before you.

You efforts should be entirely devoted to direct sales marketing, if you’re ever going to sell every bottle you’ve produced, minus your samples from your promotional budget. When your brand is so hot and it sells itself, someone might notice… but not a second before, truth being told.

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9 Responses to “Small Producers Don’t | Won’t Matter to Wholesalers ~ Perhaps Ever Again”

  1. So true, and so frustrating…

  2. Tom Geoghegan says:

    Unfortunately…way too accurate. Wish the small producers would put a concerted effort into more workable pricing for the indy retailers and at least establish a foothold in this trade channel.

    Just a thought.



  3. Kurt Burris says:

    I was so disappointed moving to California from Colorado about moving where wine was sold in grocery stores. Little did I realize that it would be the same 200 wines in every single grocery store. When I hear about Colorado moving to allow grocery store wine sales, I think of all the cool wine shops, with small production wines, that will be put out of business.

  4. Habeeb Adegbite says:

    I really like your post, can you do one about rose champagne. Thank you

  5. Roger Beery says:

    This is another why the use of distributors should be an optional distribution channel and not a state mandated one. Of course the large wineries are able to “incentivize” the wholesaler to get that position at the selection table…

  6. Jo Diaz says:

    Yes, I can and will. Tomorrow’s blog is about Rose, but not sparkling. I’ll put the word out Habeeb. I’ll let you know when it’s live.

  7. Jo Diaz says:

    So true, Roger, so true… Buy your way in…

  8. Rob says:

    I’ve seen so many articles about big distributors becoming bigger and ignoring small producers. That’s mostly true. But you have to be aware that there are thousands of us small distributors around the country who specialize in small growers. More and more, we are being shut out of grocery and box stores as they are largely beholden to scan data that doesn’t reflect what’s happening in the independents. Rather than painting all distributors with the same brush, may I recommend that you spend your wine dollars with those retailers and restaurants who support small wineries and the small distributors who represent them?

  9. Jo Diaz says:

    I agree, Rob. This story is about oligopolies and the squeeze they have on small producers. That same squeeze also applies to small wholesalers. The best part of your job is that you do have the ability to actually form relationships, and those wine shops hand sell your brand’s wines. Still, as you’ve stated, that’s also becoming harder and harder. I wish, when the olygops do come in, they didn’t also steal the soul of wine away from the grocery and box stores… People should have the choice of fine wines.

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