What's Trending — The State of Independent Distribution in the U.S.

Consolidation at the top of the distribution tier in recent years has resulted in higher levels of competition among smaller, independent distributors and suppliers alike. While at one time the U.S. market maintained around 3,500 wholesalers, this figure has been cut by more than two-thirds in the present day. Meanwhile, the number of wineries and craft distillers has exploded, narrowing the funnel through which suppliers can gain access to the second tier. With such high levels of competition among suppliers and rapid consolidation in the distribution tier, one big question looms: how are independent suppliers able to get the attention they need from distributors?

In this episode, Emily Pennington sits down with Mark Harmann, the National Sales Director of the Independent Distributor Network (IDN), for a discussion about the state of beverage-alcohol’s second tier. The two dive into Mark’s seasoned industry background, how the Independent Distributor Network operates, and the options available to suppliers and distributors who want to gain visibility in this cluttered landscape.

If you’re looking to understand the status quo of the beverage-alcohol distribution tier, Harmann has you covered. He details the evolution of the distribution tier and explains how we arrived at the current environment today. He also explains the issues that IDN was built to solve and shares how his organization serves as a model for remedying the problems posed by consolidation.

This episode also offers some invaluable advice for brands when pitching to a distributor. As someone who aligns brands and distributors for a living, Harmann tells suppliers what to come to the table with when trying to attain distribution.

Episode Breakdown:

5:30 – Harmann’s background
7:10 – Harmann’s role at IDN
8:43 – What is IDN in a nutshell?
9:30 – History of the distribution tier in the U.S.
12:45 – Brand advocacy for national vs independent distributors
15:44 – How IDN helps smaller brands
18:20 – What distributors look for in suppliers
23:30 – How brands find IDN
24:30 – IDN’s plans for the future
25:30 – Common traits between wholesalers in IDN
28:30 – Advice Harmann gives to prospective members
32:50 – Best communication practices between suppliers and distributors
35:00 – Incentivizing your distributor