What Happened to the Old Days in the Wine and Spirit Game!

I left the retail wine and spirits game many years ago. After being an operator for 20+ years at Sam’s of Chicago, we decided as a family, we did not want to die behind the counter. A fate that many retailers suffer. When I left the game, I went into consulting. First at PricewaterhouseCoopers (please don’t blame me for Oscars mishap), and than to my own firm. Now I consult with brands, distributors and retailers. I long for the old days.

I remember well when a distributor came on a call to our stores, they walked in, usually with a coffee and usually at 6am.  The conversation was friendly, personable and above all fruitful. At the time, pre 2010, there were a handful of big distributors, countless small guys and a solid flow of brands. There were brand books. Winemakers and distillers in market. Producer visits and easy to achieve purchasing deals. I long for the old days.

Today I was shooting some PS announcements for a new distributor coming to market. It made me think about how times have changed, and it made me further think about what can a brand/ distributor do to survive.

I have written before about the bottle neck, excuse the pun, of brands coming to market with a shrinking distributor market.

More input, less output and a choked sales channel. Now, lets stack on top of that the fact that the retailer, both on and off premise, cannot price complete with the growing web game, big box growth, and the growth of brands as commodities.

Every tier must seek out from the tier above a small niche market segment for brands and products. Across all categories, wine, beer, and spirits. There will be no other way to compete.

The big 5 distributors will continue to aggressively sell core brands that move the market while also satisfying their contractual agreements.

Changing your inventory mix to more private label, niche, craft and speciality can be a solution. Finding the distributors that carry these items can be the panacea that you need.

The good news is that the burgeoning demo of Millennial and hyper local selling can be the life raft the business needs.

This can be an opportunity for retailers and distributors to increase gross margin and selling profit. If the savvy are astute they can re balance inventory to an overall higher gross margin for their company and thus free up more cash flow.

Now I know that it is never this easy. It is incredibly easy as to write this from a Maggiano’s in Santa Rosa, CA. But with market forces working in this fashion the tier below will give rise to a better tier above within the 3 tier system.

Force your retailer to stock better, more specialty product, retailers need to do the same to distributors and more wineries, distilleries and breweries need to enter the market to support the tier below. This is what our business needs to do as time goes in. 

I long for the old days