The Wine Financial Symposium, a retailer-distributor relations panel, was held this past September to explore the future of the retail tier in the US alcohol market. The panel expressed insights that ultimately reflected change from the old model. In the past, retailers would focus solely on shelfing top brands. With fragmentation trending in the market today, it has become more common for these retailers to focus on smaller brands. For example, Mike Osborn, founder of online retailer Wine.com, stated that its offerings of “small-lot, tasting-room-only” wines are one of its main value adds. Young’s Market, the sole distributor on the panel, recognized the market transformation as well. Dan Grunbek, EVP of Business Development, stated, “In the old days it was just planning on-premise, off-premise, 10% each, ‘see you next year.’” Through the creation of a commercial team, Young’s is now able to provide in-depth analysis of the retail channels its suppliers are selling to. This analysis is aimed to optimize the selling process and expand the reach of the brands it distributes. Even with the changes and the ability of certain producers to ship directly to retailers, certain retailers still prefer going through a distributor. Curtis Mann, Raley’s beverage buyer, noted, “In a lot of cases it’s easier for us to send a line to the distributor because… there’s only so much time the four of us have in the liquor department at Raley’s to manage a bunch of individual customers.” With an effort to advance business, players from all three tiers will likely adapt their offerings to the changing retail environment.
Source: Wine & Spirits Daily, Wine Financial Symposium