With more than 90,000 wine brands in the US market, wineries need to be very sophisticated in their strategic marketing if they want to be represented in top retail establishments. However this generally requires finding and developing a positive working relationship with distributors who can assist them in placing their wines. But what steps should wineries take to work effectively with distributors?
Following is a list of seven tips to work successfully with wine distributors. These are based on years of experience in working with thousands of domestic and international wine brands. Wineries who utilize these tactics generally achieve their placement and sales goals via relationship marketing with distributors.
- Communicate Priorities – It is very important for wineries to develop a plan in advance regarding their goal priorities when communicating with distributors. This means stating brand goals in priority order, some of the best wineries assign priority goals by channel. Priorities should also include suggested retail pricing as well as any promotions by market. When calculating pricing, the winery should identify the suggested shelf price, by-the-glass (BTG) price and wine list price.
- Annual/Quarterly Programming – Ideally the winery will have developed a one-year plan for each priority brand, but at a minimum it should be 90 days. The plan should include proposed incentives, distribution targets and support materials such as tastings, point of sale, scheduled promotions and advertising.
- Active in the Trade – It is critical for winery representatives to be active in the trade. This means spending time traveling with distributor sales reps to call on clients. Though the rep does his/her best to represent the winery well, there is nothing as effective as the winery owner, winemaker, or a dedicated winery sales person shaking hands and interacting with the retail shop, bar, or restaurant buyer. Sharing personal stories, building relationships, and creating good will is essential for success in the US wine industry.
- Quick Decisions – Some of the best wineries are able to make quick decisions to capitalize on opportunities. Being able to react to distributor feedback and change direction and programming has become increasingly important in the every changing wine market. Building a strong plan is critical for success, but remaining flexible can make the difference in achieving goals when opportunities arise.
- Schedule Communication – It is important to keep communication lines open between winery and distributor. Serval wineries have set monthly and quarterly meetings to analyze current programs and discuss future initiatives. In addition to a set meeting schedule, it is imperative to be available to address distributor and customer needs. This promotes transparency between both companies.
- Innovative Programs – In such a competitive marketplace, retailers are seeking innovative, out of the box promotional ideas. Anything a winery can do to stand out in a crowded market is welcome, though not all ideas can be implemented. An example of a successful innovative brand launch was a winery that set up photo booths in liquor stores so that consumers could have their photo taken with the wine and send it to friends. Another wine brand offered to etch bottles with personal sayings, such as “Happy Birthday.” Restaurants are looking for innovative ideas as well, such as utilizing a wine on tap program where customers can serve themselves. Other restaurants are utilizing lobby displays to peak customer’s interest before they sit down.
- K.R.A.F.T. Long-term Relationships – Finally it is important to think of the relationship between a distributor and a winery as a long term one. Therefore this requires some skill and time in “Krafting” the relationship. By remembering and implementing the simple acronym of KRAFT, wineries should be able to develop healthy and successful relationships with distributors.
. K = Knowledge – the winery should provide knowledge about their brands to the distributor, especially memorable stories that will help the brand stand-out from the competition.
. R = Recognition -taking the time to recognize a distributor rep or sales team that has done a good job for the winery is important. This doesn’t just mean monetary awards or prizes, but by writing an email or letter of recognition and thanks to the rep’s manager, or calling to express appreciation.
. A = Accessibility – the winery should always be accessible to talk with the distributor rep by providing a name, cell phone number, and email. This is especially important if the winery sales rep changes positions. The distributor needs to know who to contact at the winery.
. F = Follow-up – it may be hard to believe, but many wineries do not follow-up with the distributor to see how a promotion and or program fared. It is important to follow-up, to provide feedback, discuss strategy, and provide congratulations when things go well.
. T = Teambuilding – celebrating success together is part of what helps to solidify a long term relationship. Therefore, wineries should take the time to create teambuilding situations with distributors, including not only meals together, but fun and memorable experiences. Use creative ideas to launch new initiatives and brands such as theme based meetings. Events and sales meetings outside of the office add to the excitement and priority of the initiative.
In conclusion, regardless of the size of the winery or distributor, building an effective relationship is important for success in the US wine market. Some experts have described relationship marketing as a “marriage,” or “romance.” Though it is not exactly either of these, it is a partnership that should be entered seriously and given the adequate time, professionalism, or nurturing needed for positive growth.
About the Authors: Wayne Degen is the VP of Off-Premise Sales for Republic National Distributing Company and is based in Maryland. Dr. Liz Thach, MW is the Distinguished Professor of Wine Business at Sonoma State University in Rohnert Park, California.
Source: Wine Business